Marc Andreessen & Jack Altman: Venture Capital, AI, & Media

Summary

a16z Podcast
Episode: Marc Andreessen & Jack Altman: Venture Capital, AI, & Media
Release Date: June 11, 2025

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Episode Overview

This engaging episode features Marc Andreessen (co-founder of Andreessen Horowitz) and Jack Altman (co-founder and CEO of Lattice) in a wide-ranging discussion about the evolution of venture capital, the rise of full-stack tech companies, venture math and strategy, the profound implications of AI, the interplay between tech, media, and politics, and contemporary social dynamics. The tone is candid, curious, and at times irreverent, as the speakers dissect how technology and investment trends are reshaping business, culture, and global geopolitics.

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Key Themes and Discussion Points

1. The Evolution of Venture Capital: Small Funds, Big Funds, and the "Barbell" Effect

• Venture’s Origins & Changing Playbook

  • Venture capital started in the 1950s–60s, maturing with a playbook based on "picks and shovels" or tool companies (e.g., databases, routers), which dominated until around 2010.
  • Tech companies like Uber and Airbnb marked a turning point: instead of selling tools to incumbents, startups became "full-stack," supplanting entire industries.
  • "You eat the market." (Marc Andreessen, 09:40)

• Barbell Strategy in VC

  • The industry has stratified into two extremes:
    • Large scale generalists (e.g., a16z, Sequoia): chasing billion-dollar opportunities for huge aggregate returns.
    • Niche specialists / seed investors: intensely focused, small, and agile, shooting for massive multiples.
  • The "middle"—traditional VC with moderate funds—is getting squeezed.
  • “It just doesn’t make sense to have the old-fashioned, Series A, Series B $300 million fund sitting on Sand Hill Road waiting for people to walk in the door... Those days are over.” (Marc Andreessen, 29:14)

• Customer Service Mentality

  • VC is uniquely both a service to limited partners (LPs) and to founders. The best founders “pick their investors,” a dynamic unlike any other asset class. (04:15)
  • Conflicts of interest, especially at early stages, are a “giant issue.” Founders want loyalty and are emotionally destabilized if their VC backs competitors.

• Power Laws, Omission vs. Commission

  • The real error in venture is omission: missing a generational winner hurts far more than losing with a bad bet.
  • “The error that matters is the error of omission... It doesn’t matter how many times you lose 1x—what matters is when you miss the 1000x.” (Ben Horowitz, 10:53)

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2. The Rise of Full-Stack Startups & Market Dynamics

• From Tools to Industry Eaters

  • Startups increasingly "eat" the whole industry rather than serving incumbents, enabled by smartphones, ubiquitous internet, and shifting consumer norms.
  • Market size is often wildly underestimated: “Some of these markets just turn out to be much larger than people think.” (Marc Andreessen, 10:02)

• Implications for Fund Strategy and Structure

  • As markets balloon, VC funds get correspondingly bigger, but so does specialization within firms.
  • “Of the S&P 8, they’re all venture-backed. Any one of them is bigger than the entire stock market of countries like Germany and Japan and the UK.” (Marc Andreessen, 16:38)

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3. Venture Firm Structure, Conflicts, and Barriers to Scale

• Firm Structure, Specialization, and Scale

  • a16z employs a verticalized structure: specialist teams with authority.
  • The main constraint on firm size isn’t finding great partners—it’s managing conflicts and avoiding founder disenchantment.
  • “The single biggest issue is conflicts, conflict, policy conflicts.” (Marc Andreessen, 20:59)

• Why Big-VCs Struggle to Do Seed

  • Large firms can’t or won’t do all the promising seed deals due to the risk of conflicts; the emotional element trumps logic.
  • "Structurally, we just can't do it... It's the same reason why Amazon can't give you the champagne boutique experience." (Marc Andreessen, 27:57)

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4. Investing Approaches: Risk, Returns, and the Anti-Portfolio

• Risk Appetite & ‘Take More Risk’ Ethic

  • The best VC firms press to “lean in” and be aggressive—higher risk leads to higher returns via asymmetric outcomes and power laws.
  • "The top decile firms have a higher loss rate than the mediocre firms... It's the Babe Ruth effect: home-run hitters strike out more often." (Ben Horowitz, 48:16)

• Shadow Portfolios & Decision-Making

  • a16z tracks ‘anti-portfolios’—the companies passed on at an inflection point; the lesson: do more of both, if possible.
  • "If you had the opportunity to do both the portfolio and the shadow portfolio... you should do them both." (Marc Andreessen, 50:39)

• Returns Driven by a Few Outliers

  • "It may be that there’s no such thing as a stock... there’s only an option or a bond." (Marc Andreessen, 11:55)
  • The public market—like private—is now dominated by a handful of winners (the “S&P 8” dynamic).

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5. The Next Paradigm: Artificial Intelligence

• AI as a New Computing Platform

  • "I think the analogy is to the invention of the microprocessor... everything that computers do can get rebuilt." (Marc Andreessen, 44:10)
  • AI enables previously impossible product categories, with a thesis that "all incumbents are going to get nuked." (Marc Andreessen, 44:24)
  • “This is not cloud or Internet. This is bigger. This is the next computing paradigm.” (Marc Andreessen, 44:09)

• Startups vs. Incumbents in AI

  • VC should mostly bet disruption: "They need us to maximize alpha based on disruption." (Ben Horowitz, 45:12)
  • Deployment style is to push GPs to take more risk and go earlier—even when deals are 'hairy.'

• AI, Regulation, and Geopolitics

  • AI is "dual use" (good and bad), and premature regulation is likened to the green movement’s overreach with civilian nuclear energy.
  • The US vs China AI competition echoes the Cold War: “In 20 years, the world will be running on Chinese AI or American AI. Those are your choices.” (Ben Horowitz, 64:08)
  • “The culture’s in the weights.” The values encoded in AI matter for global influence. (Marc Andreessen, 64:59)

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6. Tech, Government, and Media

• Politicization and the Tech Industry

  • The tech industry underestimated its eventual intersection with national politics.
  • “You may not be interested in politics, but politics is interested in you.” (Marc Andreessen, 71:28)

• Disintegration of Trust in Media

  • Since 2016, media–tech relations have grown hostile, blamed in part on politics, social media economics, and tech's industry-reshaping power.
  • Social media is both where "lies spread" and where "the truth spreads." It acts as an X-ray, eroding incumbent institutional authority. (Marc Andreessen, 76:59; referencing Martin Gurri’s Revolt of the Public)

• Journalism’s Dilemma

  • The supposed mission—to be ‘objective’ and ‘hold power to account’—is inherently conflicting. Nonprofit media models may be even less accountable than for-profits.
  • Optimistically, as society adapts to social media, skepticism and a more mature critical approach may emerge.

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7. Social Dynamics: Preference Falsification

• What People Say vs. What They Believe

  • Large-scale preference falsification (publicly expressing opinions you don’t believe, or hiding beliefs) has become rampant.
  • Citing Timur Kuran, revolutions occur when most people "realize a majority of the country agrees with them, and they didn’t realize it." (Ben Horowitz, 86:01)

• Impact of Social Media Mobbing

  • In democracies, "cancel culture" and reputational mobbing are the main tools enforcing conformity.
  • “The optimistic view: part of adapting... was just learning to not destroy people’s reputations so readily.” (Marc Andreessen, 91:08)

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8. Notable Quotes & Memorable Moments

On “Barbell” Venture Capital

• “Structurally, it’s the same reason why Amazon can't give you the champagne experience. There has to be the other side of the barbell: intense focus and deep relationship.”
  — Marc Andreessen, 27:57

On AI Disruption

• “We're investing against the thesis that basically all incumbents are going to get nuked and everything is going to get rebuilt across the board.”
  — Ben Horowitz, 44:24

On Early-Stage Investment and Risk

• “Venture is the only asset class where the leaders are trying to get the firm to take more risk, not less... Top decile firms have a higher loss rate than the mediocre firms—it's the Babe Ruth effect.”
  — Ben Horowitz, 47:27, 48:16

On Preference Falsification (and Life Advice)

• "Write down a piece of paper, two lists: what are the things that I believe that I can’t say? And what are the things that I don’t believe that I must say?"
  — Marc Andreessen, 85:15, 92:05

On Career & Life for Young People

• “Run to the heat. Try to get into those hot networks or projects. Time spent on the margin getting better at what you do is almost always better than most other uses of time.”
  — Marc Andreessen, 94:07

On Andrew Huberman’s Protocols (Lighthearted Banter)

• “I don’t do anything that he says. With one exception: stop drinking alcohol. I am physically better off, but very bitter and resentful.”
  — Marc Andreessen, 95:44

On Long-Term Optimism

• “If I were frozen for 100 years, the data I’d want is U.S. GDP. Embedded in that is technological progress, market organization, and is the U.S. still a great country?”
  — Marc Andreessen, 100:14

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Timestamps for Major Segments

• The Shift from Tools to Full-Stack Tech Companies – 06:15–09:40
• Venture Barbell, Scale, and Specialization – 16:43–22:18
• Conflicts in Venture, Early vs. Late Stage, and the Limits of Scale – 19:49–27:46
• Investing Psychology: Risk, Anti-Portfolio, and the "Babe Ruth Effect" – 47:12–51:16
• Rise of AI, Platform Shifts, and Every Industry Getting 'Nuked' – 41:41–44:24
• AI’s Geopolitics: US vs. China, Dual Use and Regulation – 61:12–66:39
• Tech, Media, and Declining Trust – 74:02–79:32
• Social Dynamics: Preference Falsification – 85:15–92:28
• Advice to Young People, Place & Chaos – 93:05–95:34
• Marc’s Philosophy on Health Trends (vs. Huberman) – 95:34–98:16
• Marc’s “Frozen in Time” Ultimate KPI: U.S. GDP – 100:14

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Final Thoughts

This episode offers a masterclass in how venture capital, technological innovation, and social forces are deeply intertwined and constantly reshaping both business and society. Marc Andreessen and Jack Altman deliver honest assessments, peppered with humor and historical perspective, on why ambition, timing, risk, and cultural adaptability matter more than ever.

For anyone interested in the future of tech, investing, or the tension between disruption and incumbency, this is essential listening. The persistent thread: in a world of rapid paradigm shifts, the only constant is intelligent, risky, and often contrarian action.

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Notable “Takeaways” for Entrepreneurs & Investors:

• Embrace asymmetric risks; fear missing the winner more than backing a loser.
• Specialization or massive scale are the winning formulas—avoid the mushy middle.
• Lean into technological paradigm shifts—AI is the new ground zero.
• Don’t rely on what’s safe to say—original thinking and conviction define outlier success.

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List of Major Quotes with Timestamps:

| Quote | Speaker | Timestamp | |-----------------------------------------------------------------------------------|-------------------|------------| | “You eat the market.” | Marc Andreessen | 09:40 | | “The error that matters is the error of omission.” | Ben Horowitz | 10:53 | | “If you had the opportunity to do both the portfolio and the shadow portfolio...” | Marc Andreessen | 50:39 | | “This is not cloud or Internet. This is bigger.” | Marc Andreessen | 44:09 | | “Write down a piece of paper, two lists: what are the things that I believe that I can’t say? And what are the things that I don’t believe that I must say?” | Marc Andreessen | 92:05 | | “If I were frozen for 100 years...I would want to know U.S. GDP.” | Marc Andreessen | 100:14 | | “It's the Babe Ruth effect: home-run hitters strike out more often.” | Ben Horowitz | 48:16 |

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For full context and deeper insights, listen to the complete episode.

Transcript

[Marc Andreessen]

Here's what I would encourage people to do. Here's the thought experiment to do. Write down a piece of paper, two lists, what are the things that I believe that I can't say? And then what are the things that.

[Ben Horowitz]

I don't believe that I must say.

[Marc Andreessen]

And just write them down.

[Narrator]

What happens when startups don't just sell the tools but decide to take over the entire industry? On today's episode, Marc Andreessen, co founder of A16Z, sits down with Jack Altman, co founder and CEO of Lattice, to unpack how the venture industry has changed from small seed funds to multi billion dollar barbell strategies and what that means for founders, funders and the future of innovation. Mark explains how the classic playbook of picks and shovels investing gave way to full stack startups like Uber and Airbnb, and why the biggest tech companies today are not just building tools but replacing entire sectors. He also talks about the realities of fund size, venture returns, power laws, early stage conflict dynamics, and why missing a great company matters far more than backing a bad one. And then it gets even. Mark dives into AI as the next computing paradigm, us, China, geopolitical risk, and why Mark thinks we're in a capital T test for the future of civilization. This episode is about asymmetric bets, ambition at scale, and the deep forces reshaping tech and power. Let's get into it. As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see a16z.com disclosures.

[Interviewer/Moderator]

I.

[Jack Altman]

Am so excited to be here with Marc Andreessen. Marc, thank you so much for doing this with me today, Jack.

[Marc Andreessen]

It's a pleasure.

[Jack Altman]

So what I wanted to start with was the topic of small funds, big funds. We had Josh Koppelman on the podcast and he made a point that resonated around fund size, the outcomes in venture, and sort of just like looking at the math of all of it. And I think as venture funds have grown it sort of spoke to a lot of people about like kind of what the plan is and sort of how tech is going to go. And so I guess to start, I'd be curious to hear your thoughts around that whole dynamic. Obviously you know you've got a big venture firm. And so I just want to hear kind of your perspective on this whole topic to start.

[Marc Andreessen]

So start by saying, like Josh is.

[Ben Horowitz]

A longtime friend and I think is a hero of the industry. And I say that because he started First Round Ventures back in the very dark days. I forget the exact year, but back during the dark days after the 2000 crash. And in fact there was a period of time back there when the total number of angel investors or seed investors operating in tech was maybe eight total. Actually Ben and I were two of them. But this was the heyday of Ryan Conway and Reid Hoffman and a very small group of people who were brave enough to invest in new companies at a point in time, time when basically everybody believed the Internet was over, like the whole thing was done. And so I just think that was an incredibly heroic, brave act. It obviously worked really well. Turns out by Low sell high actually.

[Marc Andreessen]

Is a good strategist.

[Jack Altman]

It was very good.

[Ben Horowitz]

It's very nerve wracking when you're trying to do it, but it does work. And he had brilliant timing for when he started. And the companies that he supported have gone on to become incredibly successful. And we've worked with him a lot, so we're a big fan of his.

[Marc Andreessen]

And then second is, I would say I didn't actually, I heard there was a discussion. I never, as a rule, I never.

[Ben Horowitz]

Read or watch anything I'm involved in.

[Marc Andreessen]

That's good.

[Jack Altman]

Well, he wasn't a, about, you know.

[Marc Andreessen]

And I totally missed it.

[Jack Altman]

And to summarize, basically what he was saying is he coined this like venture arrogance core idea. But basically the idea is, you know, if you're going to own 10% of a company at exit and you want to have a 3x fund and you're probably going to have a power law of outcomes, you basically need your big outcome to be like really big. And so like how's the math shake out? And basically, you know, the question he was sort of posing broadly is are the outcomes going to be much bigger? Are you going to own a lot more? Are you going to hit a lot more winners? But it was sort of like that math question.

[Marc Andreessen]

So I'd say a couple of things. So one is, look, venture is a, is actually a customer service business in our, in our view.

[Ben Horowitz]

So start with this.

[Marc Andreessen]

So it's actually a customer service business.

[Ben Horowitz]

There are two customers. They're the LPs and they're the founders. And we think of them both customers.

[Marc Andreessen]

And so, you know, at the end.

[Ben Horowitz]

Of the day the market's going to figure this out and that the LP money is going to flow to where obviously they think the opportunities are. And the founders are, you know, as you know, the best founders definitely pick who their investors are. It's actually very unusual, right? Asset class. It's the only asset class in which the recipient of the capital picks the. Yeah, you know, picks. Actually cares where the money comes from and picks, picks, picks it.

[Marc Andreessen]

So the market will figure this out. I think the big thing to responding to your general point, I think the.

[Ben Horowitz]

Big thing is the world has really changed. And so modern venture capital in the form that we understand it is basically there were examples of venture capital going back to the 15th century or something with Queen Isabella and Christopher Columbus and Whalers off the coast of Maine in the 1600s and so forth. But modern venture capital was basically a product of the 50s and 60s. Originally, this guy, Jock Whitney from the Whitney family, sort of created the model. George Doriau, who was a MIT professor, created a version of it. And then the great heyday of the 1960s, VCs Arthur Rock and those guys and everybody that followed, Don Valentine and Pierre LeMond and Tom Perkins and so forth, Gene Kleiner, you know, all those.

[Marc Andreessen]

Guys basically from that period, it's called.

[Ben Horowitz]

The 1960s through, call it 2010, there.

[Marc Andreessen]

Was like, there was just.

[Ben Horowitz]

There was a venture playbook and it became a very well established playbook. And it sort of consisted in two parts. One was a sense of what the companies were going to be like, right? And then the other was what the venture firm should be like. And so the playbook was the companies are basically tool companies. Basically all successful technology companies that were venture funded in that 50 year stretch were basically tool companies, right? Picks and shovel companies. So mainframe computers, desktop computers, smartphones, laptops, Internet access software, SAS databases, routers, switches, you know, disk drives, all these things, word processors, tools, right? And so, you know, you buy the tool, the customer buys the tool, they use the tool, but it's a general purpose technology sold to lots of people. Basically around 2010, I think the industry permanently changed. And the change was the big winners in tech more and more are companies that go directly into an incumbent industry, right? Like insert directly.

[Marc Andreessen]

And I think the big turning point.

[Ben Horowitz]

On this was like Uber and Airbnb, right?

[Marc Andreessen]

Where Uber could have been like Uber.

[Ben Horowitz]

In 2000 would have been special specialist software for taxi dispatch that you sell to taxi cab operators. Uber in 2010 was, screw it, we're doing the whole thing. Airbnb in 2000 would have been booking software for bed and Breakfasts.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

Running on a Windows PC.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

And then Airbnb is just like, screw it, we're doing, we're doing the whole thing.

[Marc Andreessen]

And so.

[Ben Horowitz]

And you know, Chris Dixon came up with this sort of term, the full.

[Marc Andreessen]

Stack startup, which he kind of meant, but the other way to think about.

[Ben Horowitz]

That is just you're actually that the company is delivering the entire basically promise of the technology all the way through to the actual customer, which is basically.

[Jack Altman]

Quicker to get there. Also, I suppose you get more margin capture when you do it that way and you just get the technology seeped in rather than having to sell it through. Is that the idea?

[Ben Horowitz]

Prior to 2010, there were two kinds of tool companies, consumer tool companies and business tool companies. Right. So, you know, B2C. B2B.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

As we called them in those days.

[Marc Andreessen]

And you know, the consumer side was.

[Ben Horowitz]

Great, but like, you know, consumer, you know, it's just like selling, you know, video games and consumer software. It was great, you know, flying toaster screensavers, it was great. But there was only so far, you know, that was going to go.

[Marc Andreessen]

And then, then the B2B side for.

[Ben Horowitz]

Things like taxi dispatch or for bed and breakfast bookings.

[Marc Andreessen]

The problem is you're selling advanced technology.

[Ben Horowitz]

Into incumbents that are not themselves technology companies.

[Marc Andreessen]

And so are they actually going to.

[Ben Horowitz]

Take those tools and then actually build the thing that the technologists know should actually get built More modern version of that is what you see now happening with cars. Right.

[Marc Andreessen]

So who's going to build the self driving electric car?

[Interviewer/Moderator]

Right.

[Marc Andreessen]

Is it going to be a incumbent.

[Ben Horowitz]

Who'S able to adjust, who's buying good.

[Marc Andreessen]

Components to be able to do that?

[Ben Horowitz]

Or is it going to be a Tesla or a Waymo. Right, that's going to do that.

[Jack Altman]

Same with SpaceX and NASA, I suppose.

[Marc Andreessen]

Exactly. Yeah, you could. There are many companies that sell technological components that go into rockets. But was any of that going to lead to the existing rocket companies making the rocket that's going to land on.

[Ben Horowitz]

Its butt and then, you know, be relaunched within 24 hours?

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so, and by the way, same thing Airbnb, Uber had. Had you sold a.

[Ben Horowitz]

The Uber, Uberized version of taxi dispatch software to the taxi would have been very good.

[Additional Participant]

Yeah.

[Ben Horowitz]

Would it have resulted in the Uber customer experience?

[Marc Andreessen]

And so I think basically what happened.

[Ben Horowitz]

Was, and there's sort of, you know, these, as Peter says, these things are overdetermined.

[Marc Andreessen]

So there's a bunch of things that happen. But it was sort of the smartphone.

[Ben Horowitz]

Completed the diffusion kind of challenge for getting Computers in everybody's hands, and then mobile broadband completed, Internet access in everybody's hands.

[Marc Andreessen]

And then the minute you had that.

[Ben Horowitz]

There was just no longer.

[Marc Andreessen]

You just had this ability to get.

[Ben Horowitz]

Directly to people in a way that you just never had. You didn't have to have a giant marketing campaign. You didn't have to have a giant established consumer brand. And so there was a way to kind of get to market that didn't previously exist.

[Marc Andreessen]

And then, look, also consumers just evolved.

[Ben Horowitz]

And people especially kind of Gen X and then millennials were just much more comfortable with than the boomers were. And they, you know, the sort of Gen X was entering, you know, and boomers and millennials were kind of entering their consumer prime at the time this happened.

[Marc Andreessen]

And then you started having these big successes.

[Ben Horowitz]

And so you started lining up Uber, Airbnb and Lyft and SpaceX and Tesla. And, you know, you kind of, you.

[Marc Andreessen]

Start stacking these up and at some.

[Ben Horowitz]

Point you're like, all right, there's a pattern here. Right?

[Marc Andreessen]

There's a thing that's happening, and that's what's happened. We're 15 years into that. And what's happened now is basically that.

[Ben Horowitz]

Idea now has blown out basically across every industry.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

And so the tech industry used to be a relatively narrow tools, picks and shovels business. Today it's a much larger, broader and more complicated basically process of applying technology into basically every area of business activity.

[Jack Altman]

The result of that is that the companies are much bigger. Like when you're the whole. When you're both the picks and the shovels to yourself of the whole company, you're much bigger. And that changes then traffic.

[Marc Andreessen]

Yeah. You eat the market.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so. And so Tesla ends up being worth more. Like, there have been points in time.

[Ben Horowitz]

In the last five years when Tesla has alone been more valuable than the entirety of the entire auto industry put together.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And SpaceX is, you know, like, you go through this and Uber is worth.

[Ben Horowitz]

Far more than the totality of every black cab operator.

[Additional Participant]

Yep.

[Ben Horowitz]

And taxi cab company that ever existed. Airbnb is worth far more than the bed and breakfast industry ever was.

[Marc Andreessen]

And by the way, it turns out.

[Ben Horowitz]

Some of these markets just turn out to be much larger than people think.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

When we do a retrospective on our analysis over 15 years, like, one of the things that's been hardest for us to do is to do market sizing. And sometimes we overestimate market size, but it's more often.

[Jack Altman]

It's the other way more often.

[Marc Andreessen]

Well, for the winners more often it's the other way.

[Jack Altman]

I guess the net blend is that you underestimate it.

[Marc Andreessen]

Yeah. In this coast of venture economics, you'll talk about.

[Ben Horowitz]

So the core thing on venture bets, right, is because venture doesn't run up leverage.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

Because nobody will bank. Will bank a startup or a venture firm for leverage because there's no assets. When these things start, it's asymmetric.

[Marc Andreessen]

You can only lose 1x, but you.

[Ben Horowitz]

Can potentially make a thousand x.

[Marc Andreessen]

And so that means then there's two errors in Venture.

[Ben Horowitz]

There's the error of commission where you invest in the thing that fails, and then the area of omission where you don't invest in the thing that succeeds.

[Marc Andreessen]

And of course, just in the math.

[Ben Horowitz]

Overwhelmingly, the error that matters is the error of omission. And so if you run an analysis.

[Marc Andreessen]

And by the way, lots of people did this, you run an analysis that.

[Ben Horowitz]

Says, right, sharing is only ever going to be as big as taxicabs.

[Additional Participant]

Yep.

[Marc Andreessen]

That leads you to the error of.

[Ben Horowitz]

A mission and not making the bet. And therefore, the difficulty with market sizing.

[Jack Altman]

In your view, is this only is. Does that only apply up to a certain size or, you know, and you look at some of the rounds that now happen at huge valuations in companies that would otherwise, you know, be a large IPO. Like, let's say somebody's raising 10 billion at 100 billion or something like that, does the power loss still apply up there? Like, how do you think about that type of round? Or do you see venture capital sort of turning into private equity at some level? At the higher end of things?

[Marc Andreessen]

Yeah. So I think there's two questions kind.

[Ben Horowitz]

Of embedded in there. One is, why aren't these companies public?

[Marc Andreessen]

Right. That's one question. And then, and then the second question is, like, even whether they're public or not, like, can they actually.

[Jack Altman]

Is it still the lose one, win 20 type of dynamic?

[Marc Andreessen]

Yeah. So I think there's a bunch of ways to look at that. So, like, the smartest public investors I've.

[Ben Horowitz]

Met with basically have the view that the public market actually works just like the private market with respect to this dispersion of returns.

[Marc Andreessen]

The extreme case I'll make sometimes is it may be that there's no such thing as a stock.

[Ben Horowitz]

It may be that there's only an option or a bond.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

Like, so. So for. So. And the reason is because there' there's fundamentally two ways to run a company. One is to try to shoot the moon, one is to try to build.

[Ben Horowitz]

For the future, and then the other way is to try to harvest the legacy, right?

[Marc Andreessen]

And if you're shooting for the moon.

[Ben Horowitz]

The big risk then the big risk of that is you might fail, right?

[Marc Andreessen]

It might not work. But if it works, you have this.

[Ben Horowitz]

Telescoping effect in the puppet market just as much as you have in the private market.

[Marc Andreessen]

And historically, the returns in the public.

[Ben Horowitz]

Market have been driven by a very small number of the big winners in exactly the same way they've been driven.

[Marc Andreessen]

By that in the private market. In fact, you see that playing out.

[Ben Horowitz]

Right now in the s and P500.

[Marc Andreessen]

So one of the things I've been saying for years now is The S&P.

[Ben Horowitz]

500, it's no longer the S&P 500. It's like the S&P 492 and the S&P 8.

[Marc Andreessen]

So there's like 492 companies in the.

[Ben Horowitz]

S and P that have no desire at all, right? Just like watching their behavior to like really charge hard at the future. Like they don't want to do it, they won't do it, they're not doing it.

[Jack Altman]

And then eight are betting everything.

[Marc Andreessen]

Eight are all in, right? And then I always say, you know, who are they? And everybody always knows who the eight are because it's completely obvious who the eight are because they're the ones that are building all the new things. And then, and then, and then again, if you, if you disaggregate, like public.

[Ben Horowitz]

Market returns over the last 10 years.

[Marc Andreessen]

You see the, it's just, you see this just dramatic, you know, explosion of value among the eight, and you see.

[Ben Horowitz]

A relatively modest growth of the 492.

[Marc Andreessen]

So even the S&P 500 is like having a portfolio of bonds and options and it's incredibly barbelled. And so I just, I think. And then people get cynical on this.

[Ben Horowitz]

And they say, well, you know, if.

[Marc Andreessen]

Not for the eight, the stock market.

[Jack Altman]

You'Re like, yeah, but that's the whole point.

[Marc Andreessen]

That's the whole point, right? If you have a healthy, functioning capitalist economy, the whole point is some number.

[Ben Horowitz]

Of these things are going to go nonlinear.

[Jack Altman]

This is like when someone says, ah, they're not a very good investor, but they invested in name that $100 billion company. So they got lucky.

[Marc Andreessen]

Well, you're like, okay, yeah, that's the, that's the job. That's the desired outcome. That's the thing. You know, any of us who, you know, this is like, you know, kind of the classic joke, like joke adventure is like, isn't there just A way.

[Ben Horowitz]

To invest in the good companies and.

[Marc Andreessen]

Not the bad companies. It's like, yeah, like, okay, for 60.

[Ben Horowitz]

Years we've been trying to figure that out.

[Marc Andreessen]

Here's a fun fact finding the analysis over the last 60 years. Every one of the really great venture firms through that period missed most of.

[Ben Horowitz]

The great companies while they were, while they were investing. Yeah.

[Marc Andreessen]

The best firms in the world, whether it's, you know, Kleiner Perkins in the.

[Ben Horowitz]

90S or Benchmark in the 2000s or Sequoia in the 2010s or whatever, like.

[Marc Andreessen]

They just like flat, flat out missed.

[Ben Horowitz]

Most of the winners in each cohort.

[Marc Andreessen]

Right on one hand you're just kind of like, wow, I can't. Can't you do better than that?

[Ben Horowitz]

But you've had these super geniuses for a very long time trying to do better than that. And we could have a whole separate conversation about why this is so difficult.

[Jack Altman]

The thing you said about companies building the whole stack roll ups are super popular. Should I. Is it fair to take from what you said that you're bullish on that strategy or. Not necessarily. And basically just to walk out. I mean, instead of, of, you know, building accounting software and selling it to the accounting firms, just buy an accounting firm, become an accounting firm, AIFI yourself, which I think is becoming like a more popular strategy. Do you like that or is there a nuance why it's different to buy something rather than build it yourself? From the beginning, what do you think of this whole roll up thing?

[Marc Andreessen]

Yeah, and let's, let's come back to the venture question because I was still winding up into that, but however, this.

[Ben Horowitz]

Is actually also relevant to that.

[Marc Andreessen]

So. Yeah, so there are a bunch of.

[Ben Horowitz]

Really good firms that are trying to.

[Marc Andreessen]

Do this roll up thing, you know that. I mean the opportunity with it is.

[Ben Horowitz]

Kind of very obvious.

[Marc Andreessen]

The challenge with it is just cultural.

[Ben Horowitz]

Change of an incumbent is a legacy company is just really difficult.

[Additional Participant]

Yeah.

[Ben Horowitz]

Charlie Munger was once asked, you know, a few years ago, he said, you know, ge, I think was the company is going through a big issue at the time. And he was asked at a shareholder meeting, how would you fix the culture at ge? And he's like, I have no idea. I don't even know how you would change the culture at a restaurant.

[Jack Altman]

Yeah, that's funny, right?

[Ben Horowitz]

Like, how do you do that?

[Jack Altman]

It's really hard, right?

[Ben Horowitz]

It's really hard.

[Additional Participant]

Yeah.

[Marc Andreessen]

And so, you know, you have to.

[Ben Horowitz]

Have a theory on that.

[Marc Andreessen]

I mean people, they do have, the.

[Ben Horowitz]

People doing it do have theories. I think we're much more oriented towards just trying to back.

[Jack Altman]

Well, I think it gets a little into this like private equity. It's a little bit of the venture private equity blend I see happening as related, not even just in dollar size, but in the mindset here.

[Marc Andreessen]

Well, this is where I go back.

[Ben Horowitz]

To my bonds versus options thing.

[Marc Andreessen]

Like fundamental, the way I always describe.

[Ben Horowitz]

Venture is like fundamentally we are, we are buying long dated out of the.

[Marc Andreessen]

Money call options which like seems completely.

[Ben Horowitz]

Insane except when they pay off, they pay off like spectacularly well but like.

[Marc Andreessen]

A lot of them expire out of.

[Ben Horowitz]

The money and like you know, you know statistically top end venture capital has a 50 plus percent.

[Additional Participant]

Yeah, yeah.

[Jack Altman]

Okay. Yeah, I just want to get your hot take. I really wanted to hear about this. But yeah, we can go back to the venture math thing because I think there's a lot more in there.

[Marc Andreessen]

Okay, good. So, so look, so, so, so anyway, so what's happened is the world has.

[Ben Horowitz]

Changed that are, that are being founded, that are going to be important. It keeps expanding. The number of categories that those companies are in keeps expanding. Those companies are more complicated now because they're full stack, they're in these incumbent.

[Marc Andreessen]

Industries and then the winners are getting bigger. Right. And again you just look at that in the market. I mean look, we have, you know.

[Ben Horowitz]

Of the S&P8, they're like, oh, they're all venture backed, right? Every single one of them is venture backed.

[Marc Andreessen]

Yeah, they are. On any given day, any one of.

[Ben Horowitz]

Them is bigger than the entire national stock market of countries like Germany and.

[Marc Andreessen]

Japan and the uk.

[Interviewer/Moderator]

Yeah, right.

[Marc Andreessen]

And so the telescoping, the numbers are just absurd. The telescoping effect of victory is just incredible. Right. And so what Ben and I did.

[Ben Horowitz]

Is we looked at it and we started our firm kind of as this was happening and we looked at it.

[Marc Andreessen]

And we said, all right, like this is different. You could sit here and do things.

[Ben Horowitz]

The old fashioned way, but the world is moving on.

[Marc Andreessen]

And then this goes back to the customer service aspect.

[Ben Horowitz]

The founders who are starting these kinds of companies need something different. It's not sufficient anymore to just say to have investors who are operating the way that they were investing for the previous 50 years. That's not the value proposition that they need, it's not the help that they need. And so there's a different way to do it.

[Marc Andreessen]

And so I think what's happened is.

[Ben Horowitz]

Like the industry, the venture industry, it had to restructure in order to basically accommodate the change in the market.

[Marc Andreessen]

Now having said That I don't think that's an argument.

[Ben Horowitz]

That it's just. Therefore big firms win everything. That's definitely not my thesis. And by the way, that's also not how I'm deploying my own money, which I want to talk about, because I'm living what I'm about to say, which.

[Marc Andreessen]

Is, I think what happens is what.

[Ben Horowitz]

Nassim Taleb calls the barbell.

[Marc Andreessen]

And the way to think about the.

[Ben Horowitz]

Barbell is basically, you basically have a continuum. And on the one side of the continuum you have high. And on the other side you have high specialization.

[Marc Andreessen]

And what you see in industries that.

[Ben Horowitz]

Mature and develop in this way, including many industries in the last hundred years, basically what happens is as they mature and enter their kind of full state, as they kind of flower, what happens.

[Marc Andreessen]

Is they often start with generalists that.

[Ben Horowitz]

Are neither subscale nor particularly specialized.

[Marc Andreessen]

And then over the fullness of time.

[Ben Horowitz]

What happens is they get disintermediated. And then there are scale players on the one side and there are specialist players on the other side.

[Marc Andreessen]

The most obvious example of this in.

[Ben Horowitz]

Everybody'S lives is retail. When I was a kid, there were these things called department stores. Pretty good selection at pretty good price.

[Marc Andreessen]

But not a great selection.

[Ben Horowitz]

And not a great price.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And then sitting here today, those are.

[Ben Horowitz]

All out of business. Like, they're just gone.

[Jack Altman]

It gets crushed by Amazon on one end and then like amazing retail on the other end.

[Marc Andreessen]

Exactly, exactly.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so. And why do you go to Amazon.

[Ben Horowitz]

Or Walmart or, you know, the big.

[Marc Andreessen]

And by the way, there were even.

[Ben Horowitz]

These big box guys, you know, Toys R Us and so forth. And then over time, like, Amazon and Walmart even ate that.

[Marc Andreessen]

Because when you go to Amazon or Walmart, what you get is just like an unbelievable selection of basically anything that's a commodity.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

That you just buy at, like, super low prices. And it's basically impossible to compete with that if you're subscale on the one hand.

[Marc Andreessen]

And then to your point, and then.

[Ben Horowitz]

The specialist retail experience is like the Gucci store, the Apple store.

[Additional Participant]

Yeah.

[Ben Horowitz]

You know, the, the $15 Campbell store.

[Jack Altman]

They gave you some Perrier when you walk in.

[Marc Andreessen]

Oh, they love you. Like, they're so happy to see you.

[Ben Horowitz]

Exactly right. You know, they'll.

[Marc Andreessen]

They'll do private showings for you and.

[Ben Horowitz]

You know, they'll experience the champagne. And it's like, it's like, it's like an entire experience.

[Marc Andreessen]

Yeah. And. And so what's happening is. And, and you just again, you see.

[Ben Horowitz]

This in, like, the Return. You just look on this return standpoint like this is what's happened, that this is where this is, this is how the value is.

[Marc Andreessen]

And then what happens is that just like gaps way out and it never.

[Ben Horowitz]

Comes back together again.

[Additional Participant]

Yeah.

[Marc Andreessen]

And then what the consumer does is they build portfolio of their experiences and so they buy things at unbelievably cheap.

[Ben Horowitz]

Prices at Walmart and Amazon and then that gives them more spending money to be able to spend on the boutique.

[Jack Altman]

So this middle, the bar that's in the middle, that's kind of screwed.

[Marc Andreessen]

Yes.

[Jack Altman]

What is the mechanic by which they're in trouble? Is it because the customers go away? The founder customers go away?

[Marc Andreessen]

Yeah, yeah, the founder customers go away.

[Jack Altman]

And then the who are neither getting sort of like the size and scale value nor are they getting like a special focus of sort.

[Marc Andreessen]

Correct, Exactly.

[Jack Altman]

Can you do focus, can you be a specialist with, with a $2 billion fund? Let's say.

[Marc Andreessen]

So obviously we're at scale but we do have a specialist approach inside the scale.

[Ben Horowitz]

And so we have investment verticals. They're discrete teams, they have in some cases discrete funds.

[Marc Andreessen]

And by the way they have like trigger puller authority.

[Ben Horowitz]

They can make investment decisions.

[Marc Andreessen]

Like we don't run the firm where.

[Ben Horowitz]

Ben and I sit and decide is this a good investment or bad investment? Like our specialists who make those decisions.

[Jack Altman]

And you basically determine that by. This is the size. We think you can function. This is the biggest, you can function as a specialist in a highly successful way. And then we're just going to put a bunch of those together. Is that like what defines, find the size?

[Marc Andreessen]

Yeah, well, so it's sort of, it's two. Yes, yes, but it's two parts. One is what's the, what's the external view?

[Ben Horowitz]

Is what, what's the size of the market opportunity?

[Marc Andreessen]

Just how, what, what, how much money.

[Ben Horowitz]

Does this, does this strategy does, does this vertical need. How many companies are going to be how, how many different, you know, kind of how, how complex is it? And then the other is the internal dynamic which is like, you know, you.

[Marc Andreessen]

Want every, like if you're going to.

[Ben Horowitz]

Have a team, you need everybody around the table being able to have a single discussion. And that puts natural limits on how big that can be.

[Jack Altman]

What's your limiting reagent to building an even bigger firm? Is it number of productive partners that.

[Ben Horowitz]

Like conflicts, conflict, policy conflicts, conflict.

[Marc Andreessen]

That's the, that's the single biggest issue by really.

[Jack Altman]

So if you had 50 kill, if you had all the great GPS, all wanted to work Here. And you had. Like that would still be the issue.

[Marc Andreessen]

Yeah, there would be issues. There will, There would be issues for sure.

[Ben Horowitz]

To your point, that would come with.

[Jack Altman]

So what's the conflicts thing?

[Marc Andreessen]

The conflicts thing. So the conflicts thing is the mainline venture firms forever. Meaning.

[Ben Horowitz]

Meaning the firms that do series A, series B, series C's, especially series A's and B's.

[Additional Participant]

Yeah.

[Ben Horowitz]

The relationship with the founder is just so too deep. So it's too deep.

[Marc Andreessen]

And if you as a venture firm.

[Ben Horowitz]

Invest in a direct competitor, it's, it's just, it's a giant issue. The, the founder you're already invested in will be extremely upset with you, by the way.

[Jack Altman]

Do you think that's practical? Do you think it's all emotions? Like, do you think it's correct that firms shouldn't do conflicts?

[Marc Andreessen]

I would say when we were startup founders, we felt this very deeply. It's just, it's, it's okay. So when you're a startup founder, I'll.

[Ben Horowitz]

Channel the other, the other side. When you're a startup founder, the, the whole thing is so tenuous.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

It's just like, is this thing going to work? There's like 18, 000 things can go wrong.

[Marc Andreessen]

People are telling you no every day.

[Ben Horowitz]

No, I'm not going to come work for you. No, I'm not going to invest in you. No, I'm not. I'm not going to.

[Jack Altman]

And then your board member invests in a competitor and you're like, dagger to.

[Marc Andreessen]

The heart, dagger to the heart. And then you literally, what happens is the founder is you have to go into the all hands meeting and explain.

[Ben Horowitz]

Why your investor has given up on you.

[Additional Participant]

Yes.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And you go in there and you.

[Ben Horowitz]

Do some song and dance about it and they're just.

[Marc Andreessen]

And your employees are just like your employee.

[Ben Horowitz]

Basically your employees look at you and.

[Marc Andreessen]

They'Re just like you, the founder are.

[Ben Horowitz]

So weak and lame.

[Interviewer/Moderator]

Yeah, right.

[Jack Altman]

You can't even get your board member to not invest in a competitor.

[Marc Andreessen]

Exactly.

[Jack Altman]

What about the marginal stuff though? Because like, you know, all these companies are near each other. They blend, they evolve over time. So like, how does this, how does this play out on a practical level for firms?

[Marc Andreessen]

It almost never plays out the way.

[Ben Horowitz]

That the founders think it's going to play out.

[Marc Andreessen]

And I say that in two dimensions. Number one, the company. This. Historically, what we've seen is that the founders who think that they're directly competing.

[Ben Horowitz]

With each other generally end up not doing so because one or the other of them changes strategies and then they.

[Marc Andreessen]

Diverge, which, by the way, is natural.

[Ben Horowitz]

Because it's like specialization. The company specializes, they end up not competing.

[Marc Andreessen]

But the other thing that happens is two companies that were not competing that.

[Ben Horowitz]

You'Re already invested in pivot into each.

[Jack Altman]

Other and then they're mad at you.

[Marc Andreessen]

Yes. And then they're very upset and you have to remind them that, like, that.

[Ben Horowitz]

You didn't know that that was going to happen and it's not your fault.

[Marc Andreessen]

And then they're still set. And so I would say the founders are not the founders. And also we have very low predictability.

[Ben Horowitz]

Of terms of where the conflicts are going to be.

[Marc Andreessen]

But that doesn't ameliorate any of the.

[Ben Horowitz]

Emotion at the time.

[Marc Andreessen]

So it doesn't actually help. It doesn't help for us to explain.

[Ben Horowitz]

To the founder, oh, don't worry about this guy who you think is directly competitive because he won't be in a year because you can't prove that. And the issue is, in the moment.

[Jack Altman]

What does that leave your. How does that impact your strategy? Meaning, like, if, you know, conflicts are this huge issue, issue, and you've got, you know, a big aggregate fund and so it's very important to catch winners. And then you invested in, you know, Blue Origin, which is really good, but SpaceX is, you know, bigger or whatever happens. Yeah. What does that imply for your strategy when it comes to, like, should we, you know, doing seeds and A's and things like that?

[Ben Horowitz]

Correct.

[Jack Altman]

Versus, like, say, you know what, let's just wait till, like the D. Correct. Let's have D be our early stage.

[Ben Horowitz]

That's right.

[Marc Andreessen]

So the most obvious thing you do.

[Ben Horowitz]

Is you just like, oh, we just need to wait because we need, we need to wait for clarity.

[Jack Altman]

Just don't deal with this whole issue.

[Marc Andreessen]

Right.

[Ben Horowitz]

Just wait, just wait. Keep, just keep, keep delaying and keep delaying until it's obvious what, what the answer is and who the.

[Jack Altman]

If it's big, it's going to be really big, so we can buy later.

[Marc Andreessen]

But then the problem with that is.

[Ben Horowitz]

All right, now you're out of the venture business, right. Because now you're doing as you, as you said now you're basically doing Series Ds. Now you're a pure growth investor.

[Marc Andreessen]

And by the way, there are very.

[Ben Horowitz]

Good pure growth investors. But like, our determination is to stay a venture investor.

[Additional Participant]

Yeah.

[Ben Horowitz]

Because we think that that's kind of the whole point.

[Jack Altman]

Why is it so important? Is that just because it's what you like or is there a strategic reason that it's important to stay Doing early.

[Marc Andreessen]

So we've always wanted, I mean that's.

[Ben Horowitz]

The way we've always thought about it is we've always wanted to kind of be the founder's best partner and like to be, to be the one who's like the closest in, the one that can really be relied upon, the, that's going to be around for the longest amount of time, the one who they can really trust.

[Jack Altman]

And it only happens early.

[Ben Horowitz]

Yeah, like it's, yeah, it's your, it's your early guys. And so it's hard to insert after that.

[Additional Participant]

Yeah.

[Marc Andreessen]

And then look, the other thing is like there are great growth firms that.

[Ben Horowitz]

Do invest later and have done very well, but I, we just think there's so much information at the early stage.

[Marc Andreessen]

Like so for example, when we, when we make a growth investment, because we.

[Ben Horowitz]

Have the active venture business that we have by the time we make a growth investment, you know, we have either invested in the company for several years.

[Marc Andreessen]

Or at the very least we've met.

[Ben Horowitz]

With them repeatedly over time. And so we just, we end up with just like enormous amounts of information.

[Marc Andreessen]

And then the other thing, by the.

[Ben Horowitz]

Way, is, you know, there's, there's, there's kind of time arbitrage, which is sometimes the right answer is just like, okay, just invest in SpaceX or whatever later on.

[Marc Andreessen]

But sometimes the answer is no, there's.

[Ben Horowitz]

Actually a new thing totally.

[Marc Andreessen]

Do you invest in the MySpace growth.

[Ben Horowitz]

Round, the Facebook seed round?

[Marc Andreessen]

And if you're not in the early.

[Ben Horowitz]

Stage, you won't know that because you won't see the early things.

[Marc Andreessen]

And then by the way, the other.

[Ben Horowitz]

Thing I'd just say is financially one of the things people say that is.

[Marc Andreessen]

Inaccurate is they say if you're running.

[Ben Horowitz]

A big fund, you're not going to have the time to spend on the early stage opportunities because you can't justify it before you're putting the money.

[Marc Andreessen]

But that's actually not true in venture.

[Ben Horowitz]

Because the aggregate dollar opportunity on early stage is just as high as any growth investment.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

Because if you get the right venture.

[Ben Horowitz]

Investment and you can make $10 billion on the upside case, it's definitely worth my time to spend with the early.

[Marc Andreessen]

So I spend as much time as.

[Ben Horowitz]

I can with the early stage founders, you know, for that reason.

[Jack Altman]

So the barbell, there's, you know, there's big on one end, there's something sort of like me on the other end. Selfishly, I'd love to know, like, you know, I would assume you think it's better to be the big Version. But, you know, if you were conditioned on needing to be me at the small end of the barbell, like, how would you approach it? And what's.

[Marc Andreessen]

They're both good, they're both good. This is the thing is they're both good. They're both good. And if I were not doing this.

[Ben Horowitz]

I would immediately do what you're doing.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

So.

[Jack Altman]

Okay, that's good to hear.

[Marc Andreessen]

Yes, 100%. And then I would say I actually invest this way. So my liquid assets are basically tied.

[Ben Horowitz]

Up in either A16Z funds on the one side, or I run a very aggressive personal investment program in basically angel and early stage seed funds. And it's because I believe in the barbell. I believe in the barbell so much.

[Marc Andreessen]

And so. But the conflict thing, I wanted, I wanted to explain because that's the issue. So the big firm, like, we do seed investing, it's just we have this.

[Ben Horowitz]

Problem every single time we're looking at a seed investment, which is like, are.

[Marc Andreessen]

We really fully convicted that this is.

[Ben Horowitz]

Going to be the winner?

[Jack Altman]

And even seed, it creates a conflict core, a board seat.

[Marc Andreessen]

There's debates, there's always debates on this is like, you know, do the seed ones care as much?

[Ben Horowitz]

Do the growth ones care as much? Do the crypto ones care as much?

[Marc Andreessen]

What I'll tell you is it's not a logical question.

[Ben Horowitz]

It's an emotional question. And we're just very sympathetic to the founder that needs to be able to justify their authority.

[Jack Altman]

You also definitely can't ask while you're like, if somebody asked me while they were making investment, hey, is it okay if we invest in a conflict in a couple years? I'd be like, what are you talking about?

[Marc Andreessen]

You know, and we've done these things, we've tried that. We used to have this thing, we.

[Ben Horowitz]

Used to have this separate branded thing called a 16cc. And we were like, well, we have a different conflict policy on this.

[Marc Andreessen]

And it's like, great in theory, but no. So the way I think about it basically is the more successful you are.

[Ben Horowitz]

As a venture firm, the bigger the issue this is going to be because the more the people that you were investing in are going to care.

[Marc Andreessen]

And so it's like the downside of success.

[Ben Horowitz]

But.

[Marc Andreessen]

The only investors, you don't care whether they is literally, if you don't.

[Ben Horowitz]

Care what they think about anything, if they just don't matter at all. And everybody knows that they don't matter at all.

[Marc Andreessen]

So there's that. So therefore, it can be simultaneously, both.

[Ben Horowitz]

Of these things are True, number one.

[Marc Andreessen]

Is we definitely do lots of early.

[Ben Horowitz]

Stage investing and we do make seed bets.

[Marc Andreessen]

But it's just also true that we.

[Ben Horowitz]

Can'T structurally, for this reason, we cannot do all of the seed investments that we would like to do. In fact, we can't even do a tiny fraction of them. It's just like strategically, we just, structurally, we just can't do it.

[Marc Andreessen]

And again, this goes back to the barbelt. So that means structurally, it's the same reason why Amazon can't give you the champagne experience. It's the same thing.

[Ben Horowitz]

They're not set up for it, they can't do it. It's not a scaled strategy.

[Marc Andreessen]

And so what has to happen is.

[Ben Horowitz]

There has to be the other side of the barbell. There has to be the specialization and intense focus and deep relationship.

[Interviewer/Moderator]

Thing.

[Marc Andreessen]

And, and that's, and that's the role.

[Ben Horowitz]

Of the angel investor and the seed investor.

[Marc Andreessen]

And that's, and of course, in startups that's incredibly important because that's the most formative.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

Fraught time in the life of these.

[Ben Horowitz]

Companies is when they're first getting started.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And as, as you know, right.

[Ben Horowitz]

Half the time these are people who haven't, you know, they haven't started a company before, they haven't run a company.

[Marc Andreessen]

Before, some of them haven't had a job before.

[Additional Participant]

Yeah.

[Marc Andreessen]

And so like they, they need to learn a lot and they need people.

[Ben Horowitz]

To work with them on being able to do this and they need to figure out how to actually, you know, do these things.

[Marc Andreessen]

And so there have to be, and.

[Ben Horowitz]

There are like incredibly high quality seed investors, angel investors on that side of the barbell.

[Marc Andreessen]

The big firms, presumably, you know, if.

[Ben Horowitz]

We succeed, we succeed by generating large numbers of aggregate dollars and a very good, you know, percentage return.

[Marc Andreessen]

The seed investors have this perpetual opportunity.

[Ben Horowitz]

To just absolutely shoot the lights out, right. On upside.

[Marc Andreessen]

And you can, you know, you know.

[Ben Horowitz]

There are seed funds that generate like 200x300x returns, right?

[Additional Participant]

Yeah.

[Marc Andreessen]

And so these are both good strategies. They're both adapted to the current reality of the market. There's just two things that fall out of that.

[Ben Horowitz]

One is the, of the middle, which.

[Marc Andreessen]

Is it just doesn't make sense to.

[Ben Horowitz]

Have the old fashioned, you know, Series A, Series B6 GPS $300 million fund sitting on Santa Road waiting for people.

[Marc Andreessen]

To walk in the door.

[Ben Horowitz]

Like those days are over and those funds are, you know, those funds are shutting down like that. That model's going away.

[Marc Andreessen]

And then the other thing that happens that causes some of the tension Is this what does a successful seed investor do?

[Interviewer/Moderator]

Right.

[Ben Horowitz]

He raises more money and wants to become a venture investor.

[Interviewer/Moderator]

Right, right.

[Marc Andreessen]

But then he, he goes. But then you're, you're, you're going from.

[Ben Horowitz]

One side of the barbell back to the middle and you're creating that same problem again.

[Marc Andreessen]

And I think that's where the tension is coming from.

[Jack Altman]

I also feel like the mechanic that happens a lot of times is when you grow the fund, the only you, you know, you, you raise a huge fund and then you start deploying it into things just because you've got to deploy at some pace. And so the threshold for I've got to deploy 400 million this year and I only see $700 million worth of investable things, I'm going to do 4/7 of them versus, you know, presumably if you only had to do 1/7 of it, you would, you know, you'd pick better, hopefully.

[Marc Andreessen]

Yeah.

[Jack Altman]

Which I think is a huge.

[Marc Andreessen]

I think that's part of it. But I think the related thing is.

[Ben Horowitz]

Your competitive set has changed.

[Marc Andreessen]

And what we, what we find with.

[Ben Horowitz]

Seed investors who migrate up and then regret it later, what we, they didn't realize was their competitive.

[Marc Andreessen]

So.

[Ben Horowitz]

Right.

[Jack Altman]

Because now they're going for bigger, more competitive rounds against Sugu and Sequoia.

[Marc Andreessen]

Yeah. All of a sudden, okay, now you're.

[Jack Altman]

Competing for $50 million B. Good luck.

[Marc Andreessen]

Right, right, exactly. And so it's just like, and, and look like market fundamentalist, if you have a better value proposition than Sequoia, you.

[Ben Horowitz]

Should go, you should, you should go offer that.

[Marc Andreessen]

But I just, I would not, I would not accidentally end up competing with.

[Ben Horowitz]

Sequoia for Series Ace. Like, I would just say that's a bad way to live.

[Additional Participant]

Yeah.

[Marc Andreessen]

And I think that's what, what that.

[Ben Horowitz]

Is what has happened to a bunch of the seed funds that have gotten larger.

[Jack Altman]

Why is it so rare for somebody to break through and get mean? You did it. And that's one that happened in the last 15 years. Maybe there's a couple others. Maybe. But why is it as rare as it is? It seems like almost more rare than a new big company, in a way.

[Marc Andreessen]

Yeah, that's true.

[Ben Horowitz]

And in fact, our analysis actually, when we started was there actually hadn't been, I think there had been two firms. Andy Radcliffe, actually.

[Jack Altman]

I mean, Thrive also.

[Marc Andreessen]

So Thrive was. Yeah, they were after us.

[Ben Horowitz]

I mean, they've done great. But in the 30 years before us, we think that there were only two new VCs that actually punched through to become top tier.

[Marc Andreessen]

In other words VCs that were not.

[Ben Horowitz]

Either firms that were built in the 60s and 70s or firms that weren't derivations of those firms.

[Jack Altman]

Founders Fund.

[Marc Andreessen]

No, no, no, no, no.

[Ben Horowitz]

The Founders Fund started at actually around the same time we did. Okay. They were a little bit earlier, but around the same time. But I mean over the preceding like 50 years.

[Marc Andreessen]

Okay, seven Rosen, you won't even. No, this is sort of the thing you won't even recognize.

[Jack Altman]

I need to read a book or something.

[Marc Andreessen]

So seven Rosen was the venture firm.

[Ben Horowitz]

The famously funded compact computer, which was the big, the big, the big winner. And then they went on to become a successful firm. Skype and Rosen, early leader in the space. And then there was a firm called Homer Winblad, which was a software specialist firm in the late 80s, early 90s.

[Marc Andreessen]

Those are the only two that punched.

[Ben Horowitz]

Into the top end while they were operating. Neither one of them sustained it.

[Jack Altman]

But they got there.

[Ben Horowitz]

They got there for a bit, but.

[Marc Andreessen]

That was like the success case. So this is a little bit like Elon looking at the history of the.

[Ben Horowitz]

Car industry and saying Tucker automotive in the 1960s. So it's so rare.

[Marc Andreessen]

It's very, very rare.

[Jack Altman]

So why is that rare?

[Marc Andreessen]

Two reasons.

[Ben Horowitz]

I think it's rare.

[Marc Andreessen]

So number one, there's the intimate reason.

[Ben Horowitz]

For it and then a sort of macro reason for it. Intimate reason for it is just like.

[Marc Andreessen]

You'Re going to have this incredible. As the founder, you're going to have.

[Ben Horowitz]

This incredibly intimate experience, very close trust relationship with whoever you're working with. And it's like, can you reference them? Do they have a history and track record of the kinds of behavior that you need and the kinds of insight that you need? And it's just like it's very hard to do that. It's very easy for an existing firm that has a long track record of success to prove that. It's very hard if you don't. So that's like the close in reason. But then the other reason goes back to the way the world is changing.

[Marc Andreessen]

Is we always believe the thing that.

[Ben Horowitz]

You want from your venture firm is power.

[Marc Andreessen]

So the thing as a startup that you want is you want them to fill in all the missing pieces that.

[Ben Horowitz]

You don't yet have when you're starting a company that you need to succeed.

[Marc Andreessen]

And so you need power. And so you need power. That means you need the ability to.

[Ben Horowitz]

Be able to actually go meet customers and have them take you seriously. You need the ability to go get publicity and major channels. Used to be media, now it's podcast and be able to get taken seriously.

[Marc Andreessen]

You need to be able to be.

[Ben Horowitz]

Taken seriously by recruits because there's thousands of startups recruiting for engineers. What makes users yours stand out?

[Marc Andreessen]

I sometimes describe it as venture firm.

[Ben Horowitz]

As providing a bridge loan of a.

[Jack Altman]

Brand, as you say, until you have your own brand that's big or bigger, you know, for your own space than the VC, you're borrowing your VC's brand.

[Marc Andreessen]

Exactly. And that has been very effective for a long time. And that was how we looked at.

[Ben Horowitz]

It when we were founders.

[Jack Altman]

That's why you did media from the beginning.

[Marc Andreessen]

Yeah. Oh, that's one of the.

[Ben Horowitz]

Yeah, it's one of the reasons. Yes. But a very, very, very powerful one. Yeah, Very, very major one.

[Additional Participant]

Yeah.

[Marc Andreessen]

And then by the way, you also need ability to raise downstream money.

[Interviewer/Moderator]

Right?

[Marc Andreessen]

You're gonna have to need to raise money again.

[Jack Altman]

And so they either need a lot of money or they need to be connected to a lot of money.

[Marc Andreessen]

Yeah, exactly. Right, exactly. And so you just better if they just have it. Yeah.

[Jack Altman]

Being full stack.

[Marc Andreessen]

Well, and then by the way, now you're getting also like again, you think like tools companies just never got into.

[Ben Horowitz]

Like for example, politics, right.

[Marc Andreessen]

Or just let's just say global affairs, global events.

[Ben Horowitz]

Like what's happening with, you know, like what's happening.

[Marc Andreessen]

How do you navigate the world?

[Interviewer/Moderator]

Right?

[Marc Andreessen]

How do you navigate Washington? You know, when the regulators show up.

[Ben Horowitz]

And they want to kill you, like.

[Marc Andreessen]

How do you navigate that? Or you're like to get in some, you know, giant fight with the egg or what? Like so, so the, especially these full stack companies, they're, they're, they're getting involved.

[Ben Horowitz]

In like very complicated macro political geopolitical situations, like much more early.

[Marc Andreessen]

And they have to like, in some.

[Ben Horowitz]

Cases they have to like escalate up to like, you know, senior government officials, heads of state, you know, major heads of sovereign wealth funds. They need to get to, you know, CEOs of major companies. You know, how do you get to.

[Marc Andreessen]

The CEOs, you know, you're, you're a new AI. You're a new AI company and you're.

[Ben Horowitz]

Trying to redefine, you know, visual production for movies.

[Marc Andreessen]

How do you get to the studio heads?

[Jack Altman]

Yeah, right.

[Marc Andreessen]

The studio heads just don't have time.

[Ben Horowitz]

To meet with a thousand startups. So where are they going to meet with you?

[Marc Andreessen]

Right. So basically it's projection of power. And this has been one of our.

[Ben Horowitz]

Theories, how we built our firm is.

[Marc Andreessen]

Optimized for maximum amount of power in.

[Ben Horowitz]

Order to be able to give the startups access to it, right?

[Marc Andreessen]

Both the startups that are already in your portfolio, but also the startups that.

[Ben Horowitz]

Don'T even exist yet.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And then again, and this goes to.

[Ben Horowitz]

Why the scale thing matters so much. It's just like, all right, there's a scale aspect of power. There's a big difference between being able to get to everybody who matters and not.

[Jack Altman]

Why is it rare for people to be able to accumulate power?

[Ben Horowitz]

Even.

[Jack Altman]

Even if they were like, let's say everybody was trying to do it, it's not like everybody could do it. What's the cause of the rarity? To be able to build enough power.

[Marc Andreessen]

In that sense, you have to want to. And so we met with all the.

[Ben Horowitz]

GPS of all the top firms basically when we were starting out, because we wanted to see who we could be friends with. And it went very well in some cases and not well in other cases.

[Marc Andreessen]

But one of them told us, this.

[Ben Horowitz]

Is a GP at a top firm in 2009.

[Marc Andreessen]

He said, yeah, the venture business is.

[Ben Horowitz]

Like going to the sushi boat restaurant.

[Interviewer/Moderator]

All right?

[Ben Horowitz]

And so the sushi boat restaurant. So sushi restaurant, restaurant where they've got the boats, right?

[Marc Andreessen]

It's got like a, they've got like.

[Jack Altman]

A water, like a conveyor belt.

[Marc Andreessen]

Conveyor belt, right? And the little sushi boat comes like.

[Jack Altman]

A lot of them.

[Marc Andreessen]

And there's a tuna roll and there's.

[Ben Horowitz]

A, you know, shrimp roll and there's this or that. And you.

[Marc Andreessen]

And he said basically you just sit.

[Ben Horowitz]

On Sand Hill Road and you're like.

[Marc Andreessen]

We'Re going to crush these guys and the startups are going to come in. And he said, you know, if you miss one, it doesn't matter because there's another sushi boat coming up right behind it. And he's just like, you just sit and watch the sushi go by and every once in a while you reach into the, into the thing and you.

[Ben Horowitz]

Pluck out a piece of sushi.

[Marc Andreessen]

And we walked out of that sink like, what the hell?

[Jack Altman]

That's funny.

[Marc Andreessen]

Like, in what industry is 2009 or something? 2009? Yeah. Like that was a very common, common. This again is the mid. This was the mid sized venture. One of the reasons, when I like, look, in 1994, I mean, it might.

[Jack Altman]

Have kind of been like that.

[Marc Andreessen]

It was, it was. When I came to Silicon Valley in 1994, I had never heard the term venture capital. I didn't even know the thing existed. And then as my business partner Jim Clark explained it to me, and I was like, There are guys like, they're just sitting there waiting to give you.

[Jack Altman]

Money, but you see this and you're like, this is going to get eaten alive.

[Marc Andreessen]

Of course, this is absurd. Like, the minute anybody takes this seriously.

[Ben Horowitz]

It'S all going to change.

[Interviewer/Moderator]

Right?

[Marc Andreessen]

And so it was this very clubby.

[Ben Horowitz]

Cartel, you know, basically kind of thing.

[Marc Andreessen]

And again, it was fine as long.

[Ben Horowitz]

As the ambitions of the industry were constrained.

[Marc Andreessen]

And then, but then again, look, the tools companies need all the power. They needed some of the power, right, but they didn't need all the power.

[Ben Horowitz]

You know, they weren't dealing with like governments.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

Or, or, you know, these sort of big macro issues, you know, at least, you know, in the early years.

[Marc Andreessen]

Well, okay, so here's another thing that's.

[Ben Horowitz]

Happened is just the world is globalized.

[Marc Andreessen]

Like, so startups, 30 years ago, you would spend your first decade just in.

[Ben Horowitz]

The US and then you would start to think about Europe and global expansion.

[Marc Andreessen]

And, and now you just, you have.

[Ben Horowitz]

To think about being a global company up front because you're gonna, if you don't, like, you're other people are gonna do it.

[Interviewer/Moderator]

Yeah, right.

[Ben Horowitz]

And so you, you just, you have to chin up as an entrepreneur. Like, the expectations are much higher than they used.

[Jack Altman]

Final question on this topic of fund size. And then I want to go to AI. What do you think? And I know you've thought about this a lot. What do you think is the limiting factor for the creation of a lot more really big companies? Do you think it's founders? Do you think it's capital? Do you think it's market maturity? Do you think it's underlying tech stuff? If you had to pinpoint the one or two things that you think would allow for there to be way more big companies, like, what is it?

[Marc Andreessen]

So there's sort of the holy trinity.

[Ben Horowitz]

Of venture startups, which is, you know, people market and technology. And I think the answer is sort of all three. And the way I would describe it is there's some limiting issue with just market size. Just how many markets are there, how big are they, how ready is the market to take something new? Then there's the technology question, which is, you know, when is the technology actually? For the venture perspective, technology moves in stair steps, right?

[Marc Andreessen]

And so things become possible in the.

[Ben Horowitz]

World of smartphones that just weren't possible.

[Marc Andreessen]

You know, you couldn't do Uber with.

[Ben Horowitz]

When everybody had a laptop, you had to wait till they had phones.

[Interviewer/Moderator]

Yeah, right.

[Ben Horowitz]

And so technology moves in a stair step. You get these paradigm shifts, platform shifts.

[Marc Andreessen]

And those just they come when they.

[Ben Horowitz]

Come, and until they come, you can't do it.

[Marc Andreessen]

And then the people side, and this.

[Ben Horowitz]

Is the one that I say vexes me the most, which is like, okay, how do you just get more of great founders? And I think part of that is.

[Marc Andreessen]

I think there is definitely a training.

[Ben Horowitz]

Thing that is real and getting people into the right scene in the right way. And the thing that Y Combinator does or the thing that Teal fellows do, those are real things and those help a lot. But also there is an inherent. Are just certain.

[Marc Andreessen]

There's. There are not infinite number of people.

[Ben Horowitz]

Running around who have the.

[Jack Altman]

You probably figure there's a lot of people who could have built big companies who haven't though, and hopefully a lot.

[Additional Participant]

Few, yeah.

[Jack Altman]

I don't know.

[Ben Horowitz]

Some.

[Jack Altman]

Some. I don't know some number, but there must be people who are just like in academia or government or educ, who are just doing something completely different, who, if they were attracted to startups, would have built a big company.

[Marc Andreessen]

So. Yes, but then the other question is like, well, okay, then why didn't they.

[Ben Horowitz]

Why.

[Marc Andreessen]

Why didn't they do the things required to get themselves in that position?

[Jack Altman]

Well, it could have been then like 2001, it was just like too many people were too scared to do it or didn't know about it or whatever.

[Marc Andreessen]

But what tell you about the people who didn't do it?

[Ben Horowitz]

Yeah, they were heard.

[Marc Andreessen]

I can tell you who didn't listen to that.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

Was Mark Zuckerberg.

[Jack Altman]

Are there more. Good.

[Marc Andreessen]

Let's just press this point harder for a moment, which is like, I always describe this as like, I always call this the test with a capital T, which is like, okay, like if you're not in position to do the thing.

[Ben Horowitz]

Is the fact that you're not positioned.

[Marc Andreessen]

To do the thing meant that you flunked the test.

[Ben Horowitz]

You've already flunked the test.

[Jack Altman]

Well, I guess the question would be, is there a subset of people who could build Facebook who other than being too scared to do it, would have had all the other ingredients? And so when everybody's not scared, you get more Facebooks.

[Marc Andreessen]

You know, there's like line in the movie.

[Ben Horowitz]

I actually never saw the movie, but there's a line in the movie.

[Marc Andreessen]

If you could have built Facebook, you.

[Ben Horowitz]

Would have built Facebook.

[Jack Altman]

Yeah, yeah, there is a line. Yeah, yeah, yeah, that's right. That was a good line.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so this is the thing. It's like, you know, are there more.

[Jack Altman]

Great founders today than when you were, let's say, in like, do you think there are more now than there were 20 years ago?

[Marc Andreessen]

I believe there are, but like, I.

[Ben Horowitz]

Maybe there's. How many more are there, right?

[Jack Altman]

Is it five times more? Is it like 50% more? Or is it.

[Marc Andreessen]

Well, so, like the, the number of wins is increasing. Like, so the. So we used to talk about the 15.

[Ben Horowitz]

15 year that matter. It's that numbers probably, if you do the analytics, probably up like 10x.

[Jack Altman]

You mean there's like 150 companies.

[Ben Horowitz]

150 companies a year that, like, really matter.

[Marc Andreessen]

And the reason is because there's so.

[Ben Horowitz]

Many more sectors now.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

So you get the industry maturation.

[Marc Andreessen]

So kind of, by inference, there kind.

[Ben Horowitz]

Of have to be.

[Jack Altman]

Like, you're saying the markets are better more than you're saying the founders are better?

[Marc Andreessen]

Well, maybe a little bit of both. Look, also, I think the founders are getting better. Part of the founders getting better is they have better training.

[Ben Horowitz]

They're all on the.

[Marc Andreessen]

Well, to start with, they're just all online. So. So when I showed up here in.

[Ben Horowitz]

1994, like, literally, there's like three books in the bookstore, none of which were that great.

[Jack Altman]

Yeah, it's not that the DNA is better, it's that they're now the ecosystem is matured to teach people better.

[Marc Andreessen]

Yeah, like, people come in and they've watched every video, you know, they watched every episode, you know, your podcast.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And they, they just walk in knowing all this stuff. And then, yeah, look. And then, look, the Y Combinator didn't exist. And, you know, that definitely helps.

[Ben Horowitz]

And, and, you know, Teal Fellows didn't.

[Marc Andreessen]

Exist, and that definitely helps. There's, you know, Brian Eno has this.

[Ben Horowitz]

Great term senior scene, you know, scene plus genius.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

And so it's just like, you know, the individual genius on his own is always, it's always, you know, it's hard to get things done. Yeah, some people do, but it's difficult. It's more often. More often in a profession where you're seeing creepy creativity happen.

[Marc Andreessen]

Yeah, there's almost always a scene, you.

[Ben Horowitz]

Know, as you know, Silicon Valley is definitely a scene in that way people. People come here and they just, they kind of get, I don't know, they just get better. They just, you know, they meet more people who are like them. They're able to aggregate together. They learn from each other.

[Marc Andreessen]

So, yeah, so look, the founders are getting better.

[Ben Horowitz]

There's more of them.

[Marc Andreessen]

But is. Is there. Does that mean there's now 10,000 as.

[Ben Horowitz]

Opposed to a thousand?

[Marc Andreessen]

Yeah, I don't know. There's and there's 8 billion people on planet Earth. Why are we.

[Ben Horowitz]

Why are we debating whether it's a thousand or ten thousand?

[Additional Participant]

Yeah, right.

[Marc Andreessen]

And so. And I just. I. That I don't know. Yeah, I would hope, hope over the.

[Ben Horowitz]

Next, you know, years and decades, we'll all figure out a way to go make sure we get everybody who can do it and get them to do it.

[Jack Altman]

That's a good segue into AI. Do you feel that we're now at the beginning of what is like the new next important, you know, paradigm? Like, is this cloud, but on steroids?

[Ben Horowitz]

Oh, yeah, Much, I think much. I think much larger. And I'll explain why.

[Marc Andreessen]

So, yeah, so. So I described, you know, I described.

[Ben Horowitz]

I described before, right. You know, the Triangle people. Technology market. The technology is ultimately the driver, is the tech.

[Marc Andreessen]

The technological.

[Ben Horowitz]

Preventing the technological step function changes drive the industry and they always have. And so if you talk to the LPs, you can see this. It's like when there's a giant new technology platform, it's an opportunity to reinvent a huge number of companies and products that now have become obsolete and create a whole new generation of companies often and generally end up being bigger than the ones that they replaced.

[Marc Andreessen]

And the venture returns map this.

[Ben Horowitz]

And so they come in waves. And the LPs will tell you it's just like, yeah, there was the PC wave, the Internet wave, the mobile wave, the cloud wave.

[Marc Andreessen]

That was the thing. And then, by the way, in venture, when you get stuck between waves, that's.

[Ben Horowitz]

Actually very hard, right?

[Marc Andreessen]

Because you've seen this for the last like five years.

[Ben Horowitz]

Like for the last five years, it's like, how many more SaaS companies are there to found? Like just, we're just out of ideas, out of categories, done, right?

[Marc Andreessen]

And so it's when you have a.

[Ben Horowitz]

Fundamental technology paradigm shift that gives you an opportunity to kind of rethink the entire industry.

[Jack Altman]

It would have been very sad, by the way, if the AI breakthrough didn't happen. Like, the state of venture would be sad.

[Marc Andreessen]

I think three years ago this was, I mean, so when we were talking.

[Ben Horowitz]

To RLP three years ago, we're just like, basically like, you know, we're in, you know, we're so Chris Dixon has this framing he uses. He calls it your adventure. You're either in search mode, hill climbing mode, and in search mode, you're looking for the hill.

[Marc Andreessen]

And it was search mode, right? And three years ago, we were all in search mode. And that's how we described it to.

[Ben Horowitz]

Everybody, which, like, we're in search mode.

[Marc Andreessen]

And there's all these candidates for what.

[Ben Horowitz]

The things could be. And AI was one of the candidates. Right. It was like a known thing, but it hadn't broken out yet in the way that it has now. And so we were in search mode. Now we're in hill climbing mode.

[Jack Altman]

Thank goodness.

[Ben Horowitz]

Yeah, big time.

[Marc Andreessen]

Yeah, yeah. And then, and then, you know, look, like I say on the technology breakthrough itself, I think a year ago you.

[Ben Horowitz]

Could have made the argument that, like, I don't know if this is really going to work because LLMs, you know, hallucinations, it's great that they can write Shakespearean poetry and hip hop lyrics. Can they actually do math? Can they write code?

[Jack Altman]

And now it obviously is.

[Marc Andreessen]

And now they obviously can. And I think for me, the turning.

[Ben Horowitz]

Point, the moment for certainty for me was the release of 01. So 01 from OpenAI the Reasoner, and then Deepseek R1. And those happen kind of back to back. And the minute those popped out and you saw what's happening with that and the scaling law that was around that, you're just like, all right, this is going to work because reasoning is going to work.

[Marc Andreessen]

And in fact, that is what's happening. And I would say just every day.

[Ben Horowitz]

I'm seeing product capabilities, I'm seeing new, new technologies I never thought I would live to see. Like, really profound.

[Marc Andreessen]

I actually think the analogy isn't to.

[Ben Horowitz]

The cloud or to the Internet. I think the analogy is to the invention of the microprocessor. I think this is a new kind of computer. And being a new kind of computer means that essentially everything that computers do can get rebuilt. I think.

[Marc Andreessen]

So we're investing against the thesis that.

[Ben Horowitz]

Basically all incumbents are going to get nuked.

[Additional Participant]

Yeah.

[Ben Horowitz]

And everything is going to get rebuilt across the board. Just across the board.

[Marc Andreessen]

Now, we'll be wrong in a bunch of those cases because some incumbents will.

[Jack Altman]

Adopt the power law. The things that are right will be super right.

[Ben Horowitz]

We'll be super right.

[Marc Andreessen]

Exactly. And then, look, the AI makes things.

[Ben Horowitz]

Possible that were not possible before. And so there's going to be entirely new categories.

[Jack Altman]

By the way, is your mindset there that you should just bet on? Like, obviously incumbents are going to win some percentage and startups are going to win some, but it's basically the dominant strategy as a venture capitalist to just plan to bet that startups are going to win it all and go for the power law.

[Marc Andreessen]

Yeah, that's right. That's right. Well, and again, the reason is, remember to two customer sets. The way the LPs think of us, the way the LPs think of us.

[Ben Horowitz]

Is as complementary to all their other investments.

[Additional Participant]

Yeah.

[Marc Andreessen]

And so RLP's all have like major.

[Ben Horowitz]

Public market stock exposure.

[Marc Andreessen]

Like they don't need us to bet.

[Ben Horowitz]

On incumbent healthcare, you know, whatever company.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

They, they, they need us to fit.

[Ben Horowitz]

A role in their portfolio which is, you know, to try to maximize alpha based on, you know, based on disruption.

[Additional Participant]

Yeah.

[Marc Andreessen]

And, and then, and then again, and then just again.

[Ben Horowitz]

The basic math of venture, which is you can only lose 1x, you can make a thousand x and you just like slam that forward as, as, as hard as you can.

[Jack Altman]

So when you have a moment in time where worldview like this, do you, you know, as a firm leader, do you give a directive that's basically like, hey everybody, we need to deploy in this kind of way right now. Or do you just build a system that's always picking birds out of the flock from like the bottoms up and you just like, well they're smart. They're going to see that every opportunity is good. Like how much is it like a top down guidance versus you know, the market's just obviously good all around.

[Marc Andreessen]

Yeah. So we don't do, like I said, we don't do top down investment decision making.

[Ben Horowitz]

So Ben and I aren't sitting saying, you know, we need to invest in category X or we need to invest in this versus that company. And we don't run, we have a legal investment committee, but we don't run a process where they come to us.

[Jack Altman]

To get approval because you're letting the leader of each group sort of make that decision.

[Ben Horowitz]

And often in those groups it's actually delegated further as delegated to the individual GP or check writer.

[Marc Andreessen]

And the reason for that is we.

[Ben Horowitz]

Just think that the knowledge of knowing what's going on and which one's likely to win is going to be focused in the mind of the person who's closest to the specific thing.

[Jack Altman]

But do you have like a risk slider or are you like hey guys, let's get a nine right now.

[Marc Andreessen]

So this is the funny thing. So venture is the only asset class.

[Ben Horowitz]

In which the leaders of the firm are in the position of trying to get the firm to take more risk, not less risk, a regular basis.

[Jack Altman]

Exactly.

[Marc Andreessen]

Because.

[Ben Horowitz]

Right, because the natural orientation towards any.

[Marc Andreessen]

Kind of anybody who's in an existing.

[Ben Horowitz]

Business, there's a natural organizational incentive to try to reduce risk because you just want to hold on to what you have and not upset the apple cart.

[Marc Andreessen]

And so Ben and I are generally.

[Ben Horowitz]

On the side of take more risk. One of the applications of this is the old Sequoia adage, which is they say when in doubt, lean in.

[Marc Andreessen]

So for example, you see this, I'm.

[Ben Horowitz]

Sure when you do it, it's just.

[Marc Andreessen]

Like, okay, there's this thing, there's this.

[Ben Horowitz]

Company that is potentially very interesting. But like there are these issues, right. And it's just like it's too early and this and that. And this weird guy's got a weird background and this, that, that, and he's in a, you know, whatever. I don't know the issues. And you know, he has a hair.

[Additional Participant]

Yeah.

[Ben Horowitz]

You know, there's hair on the deal.

[Marc Andreessen]

There's no hair on the gp.

[Jack Altman]

That's funny, that's good.

[Ben Horowitz]

But there's hair, there's hair on the deal. The founders tend to have, have, have really good hair.

[Marc Andreessen]

They're saying the deal and it's just like, all right, like what do you, what do you, how do you calibrate that?

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And, and, and the history, and again.

[Ben Horowitz]

The history of venture is when you see something that's very promising and there's.

[Marc Andreessen]

A lot of hair on it, sometimes when you invest it's going to go to zero.

[Additional Participant]

Yeah.

[Ben Horowitz]

Because the hair is going to kill it.

[Marc Andreessen]

And then sometimes when you invest it's.

[Jack Altman]

Going, it's like something where you're like, I love that, I hate that. It's much better than, yeah, everything's fine, 100%.

[Marc Andreessen]

And this is the one. The way we describe this is invest.

[Ben Horowitz]

In strength, not in lack of weakness. Or another way to think about it.

[Marc Andreessen]

Is it's not good versus great, it's.

[Ben Horowitz]

Very good versus great.

[Marc Andreessen]

Differentiating good from great is very straightforward. Differentiating very good from great is actually very hard. And again, the risk reducing way to.

[Ben Horowitz]

Try to do that is as you kind of alluded to would be kind of the checkbox thing, which is like very good team, very good market, very good this, very good that.

[Marc Andreessen]

And then you have this other one.

[Ben Horowitz]

Where it's like they've got six great things and nine like horrible things.

[Interviewer/Moderator]

Right?

[Additional Participant]

Yeah.

[Ben Horowitz]

Okay. Which is the better bet?

[Jack Altman]

Totally.

[Ben Horowitz]

Usually.

[Marc Andreessen]

Usually it's the thing with the greater strengths statistically. By the way, this shows up in.

[Ben Horowitz]

The return data from the LPs, which.

[Marc Andreessen]

Is the top decile firms have a.

[Ben Horowitz]

Higher loss rate than everybody else, which is called in baseball called the Babe Ruth effect, which is the home hitters strike out more often.

[Marc Andreessen]

And so the top performing venture firms.

[Ben Horowitz]

Statistically tend to have a higher loss rate than the mediocre firms.

[Marc Andreessen]

And it's for this reason they're willing.

[Ben Horowitz]

To invest in the thing that just looks like completely nuts but has that magic something.

[Marc Andreessen]

And so when Ben and I think.

[Ben Horowitz]

About trying to get the team to take more risk, it's almost always, it's basically either that kind of thing, which.

[Marc Andreessen]

Is like, look, and what you're doing is you're telling the person closest to it, go with your gut. If your gut tells you there's something magical here, like, go ahead, it's okay because we're going to have some losses. So it's okay to make the bet.

[Ben Horowitz]

If it breaks because of the hair, that's fine.

[Marc Andreessen]

But then the other form of risk we try to do, and I do.

[Ben Horowitz]

This a lot, is just, you know.

[Marc Andreessen]

I am trying to push the firm.

[Ben Horowitz]

Constantly is like, go earlier.

[Interviewer/Moderator]

Yeah, right.

[Marc Andreessen]

Because again that for.

[Ben Horowitz]

As we discussed earlier, the natural inclination is to wait.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

And it's like, no, no, no, go earlier. Like, we do actually want to make.

[Marc Andreessen]

These, these, these, you know, we make some seed bets, but we definitely want.

[Ben Horowitz]

To make like a lot of a bets.

[Additional Participant]

Yeah.

[Marc Andreessen]

And again, we're going to lose in.

[Ben Horowitz]

A bunch of those. We're going to screw those up and miss the winner or whatever. But like, we, we have to do that because we have to get into some of these things early. We have to, you know, get, get the level of percentage you get in the a, you know, that kind of relationship.

[Jack Altman]

Yeah, I mean, I guess there's risk that's of the flavor are more asymmetric where there's hair, but also brilliance. There's also the flavor that's just like. Well, sometimes something I struggle with is the deals where I just barely said yes and just barely passed. I'm like, I don't actually have that much confidence that I can tell the difference between those. There's another flavor of sort of be more aggressive which would just say like, just do a higher percentage of those ones where you're like right on the line. Do you give that kind of guidance? Like, do you think like that too? Where you're like, it's not just do the more out there things and we're swinging for the fences, but it's also like, let's just do a little bit more right now in general.

[Marc Andreessen]

Yeah. So we used to run this process.

[Ben Horowitz]

We called the anti portfolio, the shadow portfolio.

[Marc Andreessen]

And so the shadow portfolio was. We used to track this statistically for.

[Ben Horowitz]

Like the first five years. Exactly in this point, which is every time we do An A. Every time we do it, pull the trigger on an A round.

[Marc Andreessen]

Let's put in the shadow portfolio, the.

[Ben Horowitz]

Other company we were looking at at around the same time that we didn't end up pulling the trigger on.

[Additional Participant]

Yeah.

[Ben Horowitz]

And then let's build up representative port, like build up the altern, you know, the Earth 2 portfolio.

[Jack Altman]

I'm so curious.

[Marc Andreessen]

Well, so. And the good news is it turns.

[Ben Horowitz]

Out generally that the main portfolio did better than the shadow portfolio.

[Marc Andreessen]

But the shadow portfolio was close.

[Jack Altman]

It was a good book.

[Marc Andreessen]

Did really well. Exactly the point. So then you're just like, okay, you're.

[Ben Horowitz]

Not that smart, but you're just like, okay, obviously. What does that mean? It means do them both.

[Marc Andreessen]

And again, this goes to the thesis of how big should these firms get? It's just like, well, if you had.

[Ben Horowitz]

The opportunity to do both the portfolio and the shadow portfolio, you should do them both.

[Marc Andreessen]

What's the constraint on that?

[Ben Horowitz]

As we discussed, is conflicts. But generally speaking, you should try to do both.

[Marc Andreessen]

And by the way, this is the.

[Ben Horowitz]

I don't know if it was Josh or the other podcast that they were talking about this, but at least I saw a reference to a statistical analysis of win rate, whatever return, you know, percentage returns or whatever or percentage of wins.

[Marc Andreessen]

It's just like, it doesn't. In venture math.

[Jack Altman]

It doesn't matter.

[Marc Andreessen]

It doesn't matter. The thing that matters is were you in the next big thing as early as you could get in and buy.

[Ben Horowitz]

As much as you did?

[Marc Andreessen]

Like, that's the only thing that matters. Because if you don't do that, you miss out on the thousand x gain, the one x.

[Ben Horowitz]

Losses don't matter. They wash right out.

[Additional Participant]

Yeah.

[Ben Horowitz]

And so this idea that somehow there's some, like, virtue to being like a, you know, small, you know, we only make a few bet so we have a higher percentage.

[Marc Andreessen]

It does. Yeah.

[Jack Altman]

How much is the.

[Marc Andreessen]

I'm glad people think that that's a. I would like to encourage people to.

[Ben Horowitz]

To think that that's a virtue that they should shoot for.

[Jack Altman]

It seems like it's very hard to assemble lots of, you know, very good productive GPs into the same firm. It's just objectively rare.

[Ben Horowitz]

Yeah, that's right.

[Jack Altman]

You've done it. But it's like, doesn't happen very often.

[Marc Andreessen]

Yeah.

[Jack Altman]

Do you. I guess my first question on this is, do you think of just finding greatness and then you can't really teach it much, you know, so you're basically just going to like, hire people and see how it goes, or do you Think that it's about creating a system and conditions in which people do great work and you can actually create good investors.

[Marc Andreessen]

Yeah. So I think it only works if.

[Ben Horowitz]

There'S a point, like if there's a reason why you would have aggregation of GPs in the first place. And our answer to that is power. Right. Our pitch to GPS as to why they should join us as opposed to go to a smaller firm, start their own thing is if you come here, you just like plug into this engine that's just like massively powerful. And so everything that you do, the effects of it are going to just be like blown completely out, which is much more satisfying. And you're going to be able to actually help the companies a lot more.

[Jack Altman]

And you'll probably see more companies anyway.

[Marc Andreessen]

Yeah.

[Jack Altman]

So everything probably gets better.

[Ben Horowitz]

Yeah, that's right. That's right.

[Marc Andreessen]

And by the way, you know, some people want to have colleagues, some people don't want to have colleagues, but some people do want to have colleagues.

[Ben Horowitz]

And you'll be working with people you like and you know, who care about the same things you do.

[Marc Andreessen]

So but there has to be a point to it. And of course it's, you know, it's.

[Ben Horowitz]

On us to keep, keep proving that Right. Because the devil's in the details of whether they'll actually buy that. But so far a lot of really good, great people have.

[Marc Andreessen]

And then. Yeah, and then the second part of the question is like, okay, who do.

[Ben Horowitz]

You put in those roles?

[Marc Andreessen]

Historically we had, our old model was.

[Ben Horowitz]

Basically we only hire gps we were not developing and we could go through why that was the case. We changed that like eight years ago. We now develop our own gps. We've evolved to where. I think that's working quite well.

[Marc Andreessen]

I think the answer to your question is, it's a two part question is there's some level of just objective.

[Interviewer/Moderator]

Are.

[Ben Horowitz]

They good at doing the job?

[Marc Andreessen]

Here's a big thing we focus on.

[Ben Horowitz]

When we evaluate them, which is, you.

[Marc Andreessen]

Know, it's fine to invest in a.

[Ben Horowitz]

Category like five years early or like whatever, something goes wrong, like that's fine.

[Marc Andreessen]

What's not fine is you invest in.

[Ben Horowitz]

The wrong company and you could have invested in the right company.

[Additional Participant]

Yeah.

[Marc Andreessen]

Like at the moment you made the investment, you could, you, you made the.

[Ben Horowitz]

Wrong decision in that moment of which one you should invest in and you, you could have known.

[Marc Andreessen]

And so it's like, did you do.

[Ben Horowitz]

The work to fully address the market?

[Jack Altman]

How do you handle the fact that like, you don't know that until like six years later, and now you're going back and you're like, hey, you made this mistake six years ago. This isn't going to work out now.

[Marc Andreessen]

So it's generally. So that is a giant problem. And I would say that when we.

[Ben Horowitz]

Started, actually, when you talked to our friends in the business, what they said basically was they said, number one, you don't know if somebody's a good GP for 10 years because you don't have the return data. And then they said, number two is nobody ever wants to admit that they made a mistake. And so they never actually fire anybody. So what they do is they just keep them on the masthead and they just kind of gently, like, you know, retire them out. But they. They sit and pollute. One of the guys running one of the big firms 20, 15 years ago, told me his. He said they hired a partner, is that they hired a partner. It's an older firm, so they hired a partner. Partner in 1984, who was like a big deal at the time in the industry. And, you know, the LPs were very fired up about it. And he said he then proceeded to just like nearly ruin the firm over the next 20 years. That's crazy, because he said he want.

[Marc Andreessen]

He said all of his investments were.

[Ben Horowitz]

Bad, but then it was even worse that he talked them out of all the other good investments they could have made.

[Marc Andreessen]

And he said we couldn't get him out.

[Ben Horowitz]

You know, the reputational damage was too great.

[Marc Andreessen]

So this is a long run. And then, by the way, a lot.

[Ben Horowitz]

Of these firms are partnerships. The problem with the partnership is a partnership sounds good. The problem is you end up with lots of internal dissension and then you. You can't make decisions.

[Additional Participant]

Yeah.

[Marc Andreessen]

So this is a big issue. I guess what I would say is.

[Ben Horowitz]

Like, for example, the thing I talked.

[Marc Andreessen]

About, it's just like, it's not a.

[Ben Horowitz]

What I just described as a process issue, not an outcome issue.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

Which is like, are you doing the work?

[Interviewer/Moderator]

Right.

[Marc Andreessen]

Like it's an actual job. Like, are you doing the work?

[Ben Horowitz]

If you're not doing the work, it's relatively clear you're not doing the work.

[Marc Andreessen]

And you're probably not doing the work.

[Ben Horowitz]

Not just on one thing, you're probably not.

[Jack Altman]

So you do try to really look at the inputs?

[Ben Horowitz]

Oh, yeah, very much so, yeah. We evaluate the inputs just as much as the outputs.

[Jack Altman]

What do you do as an investor? I'm sure you've had this idea at some point where the inputs are not particularly good. They hit this one outlier thing. The Outputs are objectively now good. And so you're looking at that situation or the inverse.

[Marc Andreessen]

So this is the, this is the other part of it.

[Ben Horowitz]

The other part of it is I think there's just a subjective criteria for venture which is just are you good at it?

[Additional Participant]

Yeah.

[Ben Horowitz]

And like, do you have taste?

[Additional Participant]

Yeah.

[Marc Andreessen]

Which is unquantifiable.

[Jack Altman]

Isn't one of the nice things about your model too where like somebody gets to make a call versus in these partnerships? I think it would be very hard when nobody gets to make calls like this because at some point someone has to just like make a determination on this stuff.

[Ben Horowitz]

Yeah, that's right. And then even, you know, even who even made the call, you know, gets, gets lost.

[Marc Andreessen]

Yeah, so. So, so I think there's a taste thing and then look, I think there's.

[Ben Horowitz]

Also just like a net, there's like a network cohort branding thing which is these startups come in waves and it's not just new technology, it's also new people and they, you know, these new scenes form and like, are you in the scene or not?

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And if you're not in the scene.

[Ben Horowitz]

Like, I can't fix that for you.

[Jack Altman]

There's also a ton of path dependence, it seems like where like you make an investment that gets you in the scene. Now other founders want to work with you because you invested in this really cool company and then it just snowballs and you're like, well, I can't go back and you know, change history and get you into the snowball.

[Marc Andreessen]

Yeah, yeah, like. And again, this is what, again, I always call this. This is the test with a capital T. So there's just different versions of the complaint.

[Ben Horowitz]

Right. So you brought up the one of the founder who's like, well, I could have done this, but I was in a position to do it. All right, that's your own fault.

[Marc Andreessen]

There's another version of it which is that this is sort of the anti.

[Ben Horowitz]

VC narrative is these VCs are, are so arrogant. They don't see my unique genius.

[Marc Andreessen]

The VCs are only as a critique.

[Ben Horowitz]

They always apply against. Paul Graham is. He wrote this post on pattern matching and he always gets attacked. It's like he pattern matches.

[Marc Andreessen]

He's not looking for quality, he's just.

[Ben Horowitz]

Looking for pattern matching. And founders don't match the pattern.

[Marc Andreessen]

Is.

[Ben Horowitz]

Very important for founders to understand.

[Marc Andreessen]

Raising money from venture capitalists is the.

[Ben Horowitz]

Easiest thing you will ever do as a startup founder.

[Marc Andreessen]

We are sitting here with checkbooks waiting to write checks. We are dying for the next person.

[Ben Horowitz]

To walk in the door and be so great that they can convince us to write the check. We don't care where they come from.

[Marc Andreessen]

We don't care what country they're from.

[Ben Horowitz]

We don't care.

[Marc Andreessen]

None of it matters.

[Ben Horowitz]

It's just like, do they know what they're doing? Are they going to be able to do it?

[Marc Andreessen]

We're just dying for that. Everybody else, they're ever going to deal with candidates and customers and downstream investors, and everybody else is going to be.

[Ben Horowitz]

Much harder to deal with than we are.

[Marc Andreessen]

And so if they can't pass the test of raising money, they're not going to be able to do it. Same thing with the church gp. Like, if you can't network your way in and make good investments, that's the job.

[Jack Altman]

Okay. On that point.

[Interviewer/Moderator]

Right.

[Jack Altman]

Because there's gonna be. I completely agree with what you just said about how it's, you know, the easiest part of building a company. There's gonna be a lot of, you know, frustrated founders hearing that who are like, why can't I raise? You know, what's going on here? One of the things that I'm really, you know, you've done this for enough time now. When founders pat, you know, get a pass note, it's usually about something that's related to the market or the product or whatever. And a lot of times it's what you just. Is that like, I just want the founder to be great.

[Ben Horowitz]

Right.

[Jack Altman]

But nobody says that to me.

[Ben Horowitz]

Nobody says that.

[Jack Altman]

And so they don't get the actual feedback. And so I guess this whole dynamic of like, people aren't giving yet because it's, you know, what they're saying is not, you're not great, but it's. I didn't perceive you as great or something like that. Is there, is there some way for there to be a more honest, useful back and forth around this, or is it just one of the impossible structural things and founders just have to go around frustrated that people are saying their market's too small or it's too big or whatever. And really what it is is they're just. Just not landing is great.

[Ben Horowitz]

I mean, it's like, yeah, I mean, I know you think your baby's beautiful, but I think he's really ugly.

[Interviewer/Moderator]

Right?

[Additional Participant]

Yeah. Yeah.

[Marc Andreessen]

You know, this kid's gonna have a.

[Ben Horowitz]

Really hard time with life, man.

[Marc Andreessen]

He's really unattractive. It's really hard. It's really difficult. And by the way, you embedded two things in there. One is like, you know, one is.

[Ben Horowitz]

Do they come across as good, which in theory is fixable. But the other is like, yeah, some.

[Marc Andreessen]

People are better than other people at doing this.

[Jack Altman]

Definitely.

[Marc Andreessen]

And some people should not be start.

[Ben Horowitz]

Some people should.

[Marc Andreessen]

Should actually just like be on a team.

[Jack Altman]

Yeah. Sometimes it's a correct assessment, sometimes it's an incorrect. But there are some people who in the early days can't really. You know, there's a lot of great people who now we all know, but they couldn't raise a lot of money, so they must have shown up in 60 VC meetings is not great or whatever.

[Marc Andreessen]

And look VCs make and again. Yeah, exactly.

[Ben Horowitz]

It's like we don't know.

[Marc Andreessen]

We make lots of mistakes of omission.

[Ben Horowitz]

Like I said, Even the great VCs most of the time are screwing up.

[Marc Andreessen]

And so that's all true. The thing I always tell founders is.

[Ben Horowitz]

Steve Martin was asked this question about becoming a great standup comic and he wrote this whole book, a great book called Standing up, which he talks about this and it says the secret to being a great. He said the secret is be so great they can't ignore you.

[Jack Altman]

If your business gets good enough and you. It put prove that you're really good. You don't have to show up in the one hour with a VC is very impressive. You just proved it on the field.

[Marc Andreessen]

We're dying for people to come in and just be like, wow, right?

[Ben Horowitz]

And just be like, I cannot believe how good this is. I can't believe how good this product is. I can't believe how much the customers love it. I can't believe how much this person has gotten done in a very small amount of money.

[Marc Andreessen]

So it's this exact same thing. If I'm a talent aid, I'm just dying for the, for the young community.

[Ben Horowitz]

To get up on stage and make me laugh.

[Jack Altman]

I also think the founders who like really struggled to like raise a round or two and then the business got working. I think there's like a. There's a real strength that comes out of that. So it's not the worst thing that ever happened.

[Marc Andreessen]

Yeah. Now look, having said that, look, there's.

[Ben Horowitz]

Breakage along the way. Like there, there are.

[Additional Participant]

Yeah.

[Jack Altman]

Also it sucks. It's like really unpleasant. Yeah, I had to have it. It sucks.

[Ben Horowitz]

Yes. Yeah.

[Marc Andreessen]

So, but like, you know, look, I.

[Ben Horowitz]

Just say like, I, you know, having been a founder, like, it's an, it's an incredible privilege to be in a, in a, in an industry and in a world and in a country at a time when you can actually do this.

[Marc Andreessen]

Yeah, like so, you know, in most.

[Ben Horowitz]

Of history, in most places you, you just. This kind of thing can't happen. And then, you know, we are genuinely trying to find the anomalies, right? Like our business is defined by anomalies.

[Jack Altman]

It is true. The thing you said about. It's like an audience that wants to laugh. It's totally true.

[Ben Horowitz]

So desperate. I can't wait for somebody to finally tell a good joke.

[Jack Altman]

So on AI, I want to talk about not just the startup side, but maybe like on just some of your takes on like the broader lens of AI. I guess my first question is around AI going wrong. And I know this is like a very hard thing, but I'm just sort of for fun, really curious what you think. You know the downside case that people are very afraid of would be something like AI embodies humanoid robots and now we have a Terminator situation on our hand. It gets agency, we have a big problem. You know, that's one end of the spectrum. The happy path is that it's just like the sickest software that anybody's ever seen and like it's a tool that humans use and everything's great. Do you think about this? If so, do you have any opinion on it or are you just like it's going to be what it's going to be?

[Ben Horowitz]

Start by saying it's an important new technology. Any important new technology is what they call dual use. It can be used for good things, it can be used for bad things. The shovel can dig a well and save your life. You can bash somebody over the head with it and kill them. Fire, you know, the computer, the airplane. You know, the airplane can take you on a most marvelous vacation with your new spouse. It can also bomb Dresden, right?

[Marc Andreessen]

And so it's just, I mean atomic.

[Ben Horowitz]

Power was the big one because atomic power could be unlimited clean energy for the entire world or it could be nuclear bombs, right? As it turns out there we just got the bombs, we didn't get the unlimited clean energy.

[Marc Andreessen]

And so like that's just like generally true.

[Ben Horowitz]

These things are double edged swords. The question is like, all right, like what are you going to do about that? And are you going to like somehow put it back in the box? Are you going to somehow like try to constrain it and control it? The nuclear example is really interesting because there was a very big concern around obviously nuclear weapons and then nuclear. There's a kind of big moral panic that developed around nuclear power.

[Jack Altman]

I mean we kind of messed up with that.

[Ben Horowitz]

We very badly messed up with it. And what happened was the green movement in the 60s and 70s created something called the precautionary principle which is now there, which the same kinds of people are now trying to apply to AI which basically says unless you can prove that technology is definitely going to be harmless, you should not deploy it. And of course that literally rules out everything, right? That's just like no fire, no shovels, no cars, no planes, no nothing, no electricity.

[Marc Andreessen]

And so, and that is what happened.

[Ben Horowitz]

To civilian nuclear power, which is they just, they, they killed it. The story I tell on that is President Nixon In 1971, the year I was born, he declared he saw the oil crisis coming. The Middle east, he declared something called Project Independence. He said the America needs to build a thousand nuclear power, civilian nuclear power plants by the year 2000. Go completely clean. Carbon, carbon zero, completely electric. Cut the entire, you know, they cars 100 years ago. So it's just obvious you just cut over to electric cars at some point. And, and, and basically we need to do that.

[Marc Andreessen]

And then, and then we're not entangled.

[Ben Horowitz]

In the Middle east and we don't need to go, you know, do do all the stuff there.

[Marc Andreessen]

He then created the EPA and the.

[Ben Horowitz]

Nuclear Regulatory Commission which then prevented that from happening. Absolutely killed the nuclear industry in the U.S. right.

[Marc Andreessen]

And then the, the Germans are going.

[Ben Horowitz]

Through the new version of that in with Ukraine which is they keep shutting, you know, Europe ex France keeps shutting down their nuclear plants which just makes them more dependent on Russian oil. And so they end up funding the Russian war machine which invades Ukraine. And then you know they, they're always, they're about worried now it's going to invade Russia.

[Marc Andreessen]

And so the social engineering, I would say the moral panic and then the.

[Ben Horowitz]

Social engineering that comes out of this, the history of it has been quite bad. Like in terms of its thinking and then in terms of its practical results. Yeah, I think it would be a very, very, very big mistake to do that.

[Jack Altman]

And then to like regulate early.

[Ben Horowitz]

Yeah, yeah, absolutely, 100% to try to offset the risks in order to like and then, and then cut off the benefits. So start with that as number one.

[Marc Andreessen]

Number two, I just say look, we're.

[Ben Horowitz]

Not alone in the, in the world and we knew that before, but especially after deep seek, we really know that. And so there is a two horse race. This is shaping up to be the equivalent of what the Cold War was against the Soviet Union in the last century. It is shaping up to be like that China does have ambitions to basically imprint the world on Their ideas of how society should be organized now the world should be run. And they obviously intend to fully proliferate their technology, which they're doing in many areas. And the world's 50 years from now is going to be running on, you know, 20 years from now is going to be running on Chinese AI or American AI. Like those are your choices.

[Jack Altman]

You think that's how it'll basically play?

[Marc Andreessen]

Yeah, yeah, yeah. It's going to run on one or the other.

[Jack Altman]

How will that play out? Like, let's say it's one of the other.

[Marc Andreessen]

Like so AI is going to be.

[Ben Horowitz]

The control layer for everything.

[Marc Andreessen]

So, so my view is AI is.

[Ben Horowitz]

Going to be how you interface with the education system, with the healthcare system, with transportation, with employment, with the government, with law.

[Marc Andreessen]

Right.

[Ben Horowitz]

It's going to be AI lawyers, AI doctors, AI teachers. Okay, do you want your AI teacher? You want your kids to be taught by a Chinese AI?

[Interviewer/Moderator]

Really?

[Ben Horowitz]

Yeah, like they're really good at teaching you Marxism.

[Marc Andreessen]

And Xi Jinping thought like, you know, like the cult is another way to.

[Ben Horowitz]

Put it is the culture's in the weights.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so like how these things are.

[Ben Horowitz]

Trained and like who they're trained by, like really, really deeply matters.

[Marc Andreessen]

And so, and by the way, this.

[Ben Horowitz]

Is already an issue in lots of countries because they're like number one, they may not want Chinese AI, but number two, do they want, you know, super woke Northern California AI is another open question.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

So there are big questions on this.

[Marc Andreessen]

And so I just think like there's no question, like if you had a.

[Ben Horowitz]

Choice between AI with American values versus the Chinese Communist Party values. I mean for me it's just crystal clear where you'd want to go.

[Additional Participant]

Yeah.

[Marc Andreessen]

By the way, there's also going to be direct military.

[Ben Horowitz]

There's a direct military version, national security version of this, which is okay, do you want to live in a world of all CCP controlled robots and drones and airplanes and cars?

[Jack Altman]

I mean is, is, is that really what you want? Warfare and defense, I guess just is going to fully go AI over the next 20 years or something like that.

[Marc Andreessen]

I think that's very much true.

[Ben Horowitz]

And I think this, you know, robots.

[Jack Altman]

Plus AI, basically there's these signal.

[Marc Andreessen]

Well, there's the signal that you probably.

[Ben Horowitz]

Saw the Ukrainian attack or on the, on the Russian airplanes, you know, so.

[Marc Andreessen]

Those are no autonom, those are autonomous drones.

[Ben Horowitz]

And then they were doing AI targeting of structural, the right structural points to be able to attack the planes and destroy the planes.

[Additional Participant]

Yeah, right.

[Ben Horowitz]

And so yeah, 100% that's happening. You know, this is a major issue with our defense doctrine with respect, for example, to you know, potential invasion of Taiwan.

[Marc Andreessen]

You know, if an aircraft, Ukraine has.

[Ben Horowitz]

Been fielding AI piloted jet skis. So they take a jet ski, take a jet ski, put an autonomous pilot on it, and they strap it with explosives. And you know, you can, you can send out 10,000 of those against an aircraft carrier, right?

[Marc Andreessen]

And by the way, and you can just keep sending them, right? Because there's no loss of what.

[Ben Horowitz]

You just keep sending them until you get through.

[Marc Andreessen]

And so, yeah, so I think the.

[Ben Horowitz]

Entire supply chain, the entire defense industrial base, all the doctrine of warfare all changes. The idea of human beings in planes or on submarines just doesn't make any sense. It's all going to change and then the symmetry or asymmetry between defense and attack is going to change.

[Jack Altman]

Used the word dual use and obviously with like previous technologies, you know, they got used at some point I'm wondering does it blend from getting used to being the user? Like if, like a business, a benign business example would be if you could tell an AI hey, I want you to, you know, hey, prompt. I want you to build me a software company, you know, make it roughly do this, serve these users and run that for the next five years and just wireless me the money to this bank account. Go. And if, you know, if that worked at some point, you know, in the middle of those five years, like, you know, what's, how is it doing its own thing? Are you telling it what to do? Does that also happen, you know, in like a, a warfare scale? And I guess that's maybe like the thrust of, to me, where, you know, where it turns into something scary or particular when you get into, you know, the embodied version in warfare where it's just like, you know, the prompt is like, hey, just, you know, fight this, fight this war for the next year.

[Ben Horowitz]

Or something like that? That's right, that's right.

[Marc Andreessen]

So, so the good news, the, the, the, the messaging version of it is.

[Ben Horowitz]

Is straigh, which is, we have, you know, U.S. law, Western law has a concept of responsibility, accountability.

[Marc Andreessen]

If you use a machine to do.

[Ben Horowitz]

Something illegally is your fault, that's your problem.

[Marc Andreessen]

But by the way, if the machine.

[Ben Horowitz]

Goes wrong for reasons having to do with, not with you, then it's a manufacturing, it's a product liability issue. The manufacturer is liable. But if you use it, if I buy a shovel and I bash you.

[Interviewer/Moderator]

Over the head with it, right?

[Ben Horowitz]

It's my, yeah, the shovel killed you. But like I'm to blame.

[Marc Andreessen]

And so I think your example of the autonomous corporation, I think the legal.

[Ben Horowitz]

System is pretty perfectly prepared to deal with that, which is, yeah, it was your, your bot. You set the whole thing up. It's your fault.

[Additional Participant]

Yeah.

[Ben Horowitz]

And so there's, there's a natural, there's a natural constraint. I think there's a natural constraint on that.

[Marc Andreessen]

The mil. The most obvious version of the military.

[Ben Horowitz]

Version of the question is autonomous targeting and trigger pulling.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

And so, and, and this has been, this has been an issue in drone warfare for the last like 15 years, which is, is there a human in the loop on pulling the trigger?

[Interviewer/Moderator]

Right.

[Ben Horowitz]

So predators flying overhead, da da, da, da. Sees the bad guy. Okay. How is the decision made for the predator to launch the missile on the bad guy? And, and by the way, the way that worked for a very long time was it actually had to be an Air Force combat pilot who would actually pull the trigger on the drone very specifically, even if he wasn't otherwise responsible for like operations of the drone. You'd still get somebody whose job it was to make those decisions in the loop.

[Marc Andreessen]

There are a lot of people in.

[Ben Horowitz]

The defense field who are like, it's absolutely mandatory that in all cases it is required for the human being to make the kill decision.

[Additional Participant]

Yeah.

[Marc Andreessen]

And maybe that is the, maybe that.

[Ben Horowitz]

Is the correct answer.

[Marc Andreessen]

There's a very powerful argument.

[Ben Horowitz]

Well, as to why that should be the case. Because it's the biggest decision that any human that anybody can make.

[Marc Andreessen]

And even if you don't believe in.

[Ben Horowitz]

Like the Skynet scenarios, just the idea of a human being not being responsible for that decision.

[Additional Participant]

Yeah.

[Ben Horowitz]

Sounds ethically, morally, very scary.

[Marc Andreessen]

There is a counter argument which is human beings are really, really bad at making those decisions.

[Interviewer/Moderator]

Right.

[Jack Altman]

And so any self driving cars thing, if it's safer than a human driver, then like who's, you know. Yeah, there will be accidents, but there's fewer.

[Ben Horowitz]

Correct.

[Marc Andreessen]

And so every post analysis of any.

[Ben Horowitz]

Combat situation that you read or any war later on, you discover all these shocking things. So one is friendly fire. Like there's just huge amounts of deaths caused by friendly fire. People shooting at their own troops just because they're confused. Number two is, you know, fog of war is just like. It turns out the commanders have very little idea what's going on. They had some battle plan, it immediately goes sideways. They don't know what's. They literally don't know what's going on. They're not making this. They don't have the information to be able to make decisions. Everything's confusing. Number three, the physiological impact of stress, adrenaline.

[Marc Andreessen]

It's like, it's one thing to be.

[Ben Horowitz]

On a shooting range making these decisions, it's another thing to be like, you know, have like a severe leg wound coupled with, you know, adrenaline, you know, overload coupled with two hours of sleep the night before. And like, is the human, is even the highly trained person making the decision? Right, yeah. And then there's just like a more.

[Marc Andreessen]

Basic thing, which I think this is.

[Ben Horowitz]

Like a World War II retrospective. It's something like in a lot of combat situations, it was estimated only like 25% of the soldiers even fired their rifles. Like, just generally a lot of people just like don't act right.

[Marc Andreessen]

And so anyway, so the more you.

[Ben Horowitz]

Look at this, you're just like, wow, the human being is actually really bad at this.

[Additional Participant]

Yeah.

[Marc Andreessen]

And then all these other issues around.

[Ben Horowitz]

Collateral damage, you know, and they should, you know, accidentally shoot the civilian.

[Marc Andreessen]

And so, yeah, you're back in the.

[Ben Horowitz]

Self driving car situation, which is like.

[Marc Andreessen]

All right, if you, if you knew.

[Ben Horowitz]

You could get better outcomes by having the machine make the decision, better, safer, less loss of life, less collateral damage.

[Marc Andreessen]

And so I would say I don't.

[Ben Horowitz]

Believe I have an answer to this, but I think that is a very fundamental question.

[Jack Altman]

I guess this kind of actually feeds into the next topic, which to me is I think like tech has now gotten to a place where with the government and politics, it's sort of now undeniable. It used to kind of be an underdog, but now for reasons like this and a bunch of others, it's just too important to not be in the mix at the national stage now, which I think has really like changed the dynamic even insularly for Silicon Valley. Because now, you know, people are, you know, looking at what people are doing not just like in tech, but pretty broadly now.

[Ben Horowitz]

Yeah, that's right.

[Additional Participant]

Yeah.

[Ben Horowitz]

So I say I deeply agree with that. I believe it is mostly our fault.

[Marc Andreessen]

Like the current situation is mostly our fault in tech, which is there's an.

[Ben Horowitz]

Old Russian Soviet joke which is, you may not be interested in politics, but politics is interested in you.

[Additional Participant]

Yeah.

[Marc Andreessen]

And so I think we, we, we.

[Ben Horowitz]

And I would include myself in this. I think we all got complacent, or a lot of us got complacent between like 19 in 2010 that basically just said we could just sit out here, we can do our thing, we can talk about how important it all is, but like, it's never going to, you know, these are never going to be big social or, you know, cultural or political issues. Yeah. And we can just kind of get away with not being engaged. And then I, for all the reasons.

[Jack Altman]

We'Ve discussed, you're saying, and then once it was undeniable, we weren't prepared, and.

[Ben Horowitz]

Then we weren't prepared and we weren't even, I would say, remotely prepared. And then they're using metaphor. The dog that caught the bus. And the dog is being dragged behind the bus, tailpipe in his mouth, doesn't know what to do with the bus. And look, you know, geography, I think, has a lot to do with this. We're 3,000 miles away. You know, it's just hard to get there. They don't come here very often and.

[Marc Andreessen]

Yeah, so I guess I would say.

[Ben Horowitz]

Like, like it worked. Like we, we actually, we always wanted to build important things. We actually are building important things. There are obvious political, cultural, social consequences to them. If we don't engage, nobody's going to.

[Additional Participant]

Yeah.

[Marc Andreessen]

And then, by the way, the other.

[Ben Horowitz]

Thing I'll say is, you know, it's not like there's unanimity even in the industry on a lot of these issues.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

And so there's, you know, I would say two giant divisions right now, big companies versus small companies.

[Additional Participant]

Yeah.

[Ben Horowitz]

You know, there's often do not have aligned incentives right now and aligned agendas. And then the other is, you know, like just on AI, obviously there's a big dispersion of views even in the industry.

[Jack Altman]

I guess this probably goes to why it's important for, to some extent, at least some VCs to have relationships with the government because big tech has the resources to do it themselves. Small tech can't. And so if this is the state of the world, we actually as an industry need somebody to be doing it on behalf of little tech.

[Ben Horowitz]

Yeah, that's exactly right. That's why we're doing what we're doing.

[Additional Participant]

Yeah.

[Jack Altman]

On media in particular, I thought it was really interesting. I can't remember how many years ago, but biology, many years ago started talking about, like some fracturing about, you know, the sort of relationship between tech and the media was going downhill. I think this was mostly talking about media and inside tech, but I think probably also at the major publications and at sort of a larger scale. From my read, as often, you know, I think this was right. And from where I sit, it seems like it did kind of continue to degrade the relationship. What's interesting to me recently is I've seen a little bit of life, you know, in the sort of tech publication stuff. But it's actually been from the inside. And so, like, Eric, who you just brought on as gp, is awesome, and he's been really good at doing this. TVPM's really cool, and I don't think I've seen something like that pop up maybe ever. Inside Tech, what's your read? I guess within our bubble of like, the sort of tech media relationship and where it's been.

[Marc Andreessen]

So my background in this is I.

[Ben Horowitz]

Have a weird kind of history because of what happened in the 90s, but I started dealing with the national press and the tech press, Business Press in 1993, 1994. And I did an annual press tour to the east coast probably a week out of each year, usually in the spring. And what that means is you kind of go around and you meet with all the publishers, editors and reporters, cover everything.

[Marc Andreessen]

And I would say basically the stretch.

[Ben Horowitz]

From 94 to 2016 was generally like. I thought it was like a quite healthy, normal, productive relationship. You know, like, they would run, you know, they would do investigative reporting and they would run stories I don't like. But generally they, you know, the major publications in each of those categories were trying to understand what was going on and were trying to kind of be, you know, honest brokers and trying to, you know, kind of represent what was happening.

[Marc Andreessen]

And so the meetings were, like, super interesting.

[Ben Horowitz]

They always wanted to learn. They always had tons of questions. They were super curious about everything that was happening.

[Marc Andreessen]

That was great until 2016.

[Ben Horowitz]

It was the spring of 2017 that I went on the press tour and it was like somebody had flipped a light switch and they were across the board, like, unbelievably hostile. Like, unbelievably, like, completely. And across the board, like, 100% sweep.

[Jack Altman]

Do you know why?

[Ben Horowitz]

Absolute hostility. I think the obvious answer is Trump got nominated and then got elected. And then they blamed tech for both of those.

[Marc Andreessen]

By the way, there are a bunch.

[Ben Horowitz]

Of other factors, including that was when it's actually, there's a business side to it, which is there was the fear that the Internet was going to eat the news business in the 90s actually didn't happen. And actually 2015, I think, was the best year in history for, like, revenues to, like, newspapers.

[Additional Participant]

Yeah.

[Ben Horowitz]

And then it was really after 2015, social networking went big, and then the. Their businesses started to collapse and, you know, they started having lots of layoffs. And so that didn't help.

[Additional Participant]

Yeah.

[Marc Andreessen]

And then, you know, look, they would say, look.

[Ben Horowitz]

That was also, you know, they would say, hey, smart guy. That's also when you started doing all these things that actually matter more.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

And so, you know, everything we've been discussing, like the tech industry changed. And so, you know, you're going to get a different level of scrutiny because you deserve it. You're doing different things now. Now the political thing was just a giant swamping factor. And they. And, you know, this was a big. Yeah, you know, I don't want to get into the politics per se, but if you just, you know, it's. This whole thing ran in parallel with everything that's like in Jake Tapper's book.

[Marc Andreessen]

About, you know, like, so it's just like they just, they got locked in.

[Ben Horowitz]

On a mode of interaction that just became very polarized.

[Additional Participant]

Yeah.

[Ben Horowitz]

And very polarized and very lockstep.

[Marc Andreessen]

And, you know, from the outside, you.

[Ben Horowitz]

Just, you read it and you're just like, wow, these people, they're all like really wrapping themselves around an axle.

[Jack Altman]

Well, I think one of the other hard things is as the truth has become more accessible by other people, you more often see something in the news that you know about and you're like, wait, that's super backwards. And then somebody posts about how backwards it is. And now, you know, you see a clip of, you know, some major publication and, you know, here's the truth and everybody can tell and it's like, okay, so should we just believe the rest of it or not? I think the truth fact checking went way up too, with social media.

[Marc Andreessen]

That's right. And I would say there, you know, the cliche has been.

[Ben Horowitz]

And there's some truth to the cliche that social media is where lies spread. And there is some truth to that. Yeah, lots of lies to spread on social media.

[Marc Andreessen]

But the other side of it is.

[Ben Horowitz]

What you're saying, which I think is right, which is the truth spreads on social media.

[Marc Andreessen]

And so the way I describe it.

[Ben Horowitz]

Is social media is an X ray machine. And exactly to your point, like anytime there's. And you see this in any domain of activity right now is anytime there's a thing and there's just like evidence that it's just not the way it's being portrayed, it is going to show up. People are going to see it.

[Additional Participant]

Yeah.

[Marc Andreessen]

And that is there was this guy.

[Ben Horowitz]

Martin Gurry, who wrote this book called Revolt to the public in 2015, and he was a CIA analyst who did what's called open source analysis for 30 years, which was studying basically what was in newspapers and magazines for the purpose of political forecasting.

[Marc Andreessen]

And his prediction in 2015 in his.

[Ben Horowitz]

Book was that basically Social media was going to completely destroy the authority of all incumbent institutions. And the way that it was going to do that was it was going to reveal through this X ray effect that basically none of them deserve the credibility.

[Jack Altman]

Do you think that's kind of happened?

[Ben Horowitz]

I think that's exactly what's happening. And I think there's statistical evidence that's happening. Gallup polls, they do an annual poll now for 50 years on trust in institutions of every different kind of major institution, including the press. And all the, all the numbers are.

[Jack Altman]

Collapsing in light of widespread social media. What would be the correct sort of function or role of, like, journalism?

[Marc Andreessen]

I mean, look, I'm a believer in, like, the original. I like the original idea, right? Like, I'm.

[Ben Horowitz]

I don't know, I'm a romantic.

[Marc Andreessen]

I like, I like what. I like what journalism says that it is.

[Ben Horowitz]

I would like it to be like that. I like what the universities say that they are. I would like it to be like that.

[Marc Andreessen]

I like what the government says that it is. I would like it to be like that.

[Jack Altman]

Which should be just to, like, name it.

[Marc Andreessen]

Yeah, well, for journalism, it's just like, all right, number one, like, tell us correctly and accurately what's happening. Well, actually, there's a. There's a conflict at the heart of.

[Ben Horowitz]

The journalism question, which is that journalists say two different things. There's. One is, they say, you know, basically, be fair and objective.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

And then the other thing they say is, they say, like, hold power to account. Or they'll sometimes say they have this phrase. They'll say comfort the afflicted and afflict the comfortable.

[Marc Andreessen]

And like, there's, there's an inherent. Like, are you, Are you a. Are you an objective truth?

[Jack Altman]

Well, yeah, I was gonna say that has nothing to do with the truth. It's just unrelated to the truth.

[Marc Andreessen]

Exactly. And so there was already a conflict.

[Ben Horowitz]

At the heart of the industry, and.

[Marc Andreessen]

There'S a selection process where the people.

[Ben Horowitz]

Who go into journalism tend to be critical by nature.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

They tend to want to be on the outside looking in to be critical.

[Ben Horowitz]

Because if they didn't, they wouldn't be journalists. They would.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so, so there is an issue there. But look, like, do we need people.

[Ben Horowitz]

To tell us the truth?

[Marc Andreessen]

Yes, we do. Do we need people to hold a powerful account? Yes, we do. Like, I would like them to do that.

[Jack Altman]

Do you think they can be, like, for profit corporations and it work? Because, I mean, I think. Think another problem is they're getting all their distribution on social media. Eyeballs are what Drives the revenue. People want to, you know, stay, you know. So that also is unrelated to the truth. In fact, it's antithetical to the truth a lot of times.

[Marc Andreessen]

Yeah.

[Ben Horowitz]

So there's two, Two, two mentalities come out of that. One is, yeah, the profit incentive warps it, and you want it to not have a profit incentive. So it could be true to itself.

[Marc Andreessen]

The other argument is if you don't.

[Ben Horowitz]

Like for profits, you're really not going to like nonprofits.

[Additional Participant]

Yeah.

[Marc Andreessen]

Because at least for profits have, like. At least for profits have, like a market test. Like, at least there's like some discipline.

[Jack Altman]

Nonprofit just becomes somebody sort of like, this is my agenda. I'm going to do what I feel like arbitrarily crazy.

[Additional Participant]

Yeah.

[Marc Andreessen]

They can go arbitrarily nuts.

[Jack Altman]

It does sound worse.

[Marc Andreessen]

Yes. And they're completely unaccountable. They're completely unaccountable.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

They're in fact, in fact, it's the opposite. It's the opposite of accountability because of the.

[Ben Horowitz]

Because of the tax break.

[Marc Andreessen]

You are actually paid as a donor.

[Ben Horowitz]

To invest in the things that are the most unaccountable.

[Jack Altman]

Interesting.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so, and, and then they can spin into, like, crazy land and they don't come back. They don't come back. There's a history here. They don't come back.

[Ben Horowitz]

And so it's weird because, like, the.

[Jack Altman]

Citizen journalism thing is like a helpful fact check. It's, like, good to have and sometimes. But it does feel like it's not quite sufficient to tell the full story on everything all the time. So I do think that there's an important role. I just feel like it still feels like it's very in limbo right now.

[Marc Andreessen]

So here is a theory that would.

[Ben Horowitz]

Be a reason for optimism, which is the last eight years were basically.

[Marc Andreessen]

It was basically the human animal adapting.

[Ben Horowitz]

Adapting to the existence of social media. It's basically the assembly of the group brain. And you slam 8 billion people into a chat room together and it's just like, we're not used to it. We weren't wired for it. We're not evolved for it. And just like, oh, my God, everything goes bananas. Marshall McLuhan, actually, the great media theorist, he talked about this. He had this term called the global village is what happens when everybody gets networked together. And actually what people miss about it is he didn't mean in a good.

[Marc Andreessen]

Way, because the nature of a village.

[Ben Horowitz]

Is basically gossip and innuendo and infighting and reputational destruction and civil war.

[Additional Participant]

Yeah.

[Marc Andreessen]

Like, that's what happens.

[Ben Horowitz]

In a village.

[Additional Participant]

Yeah.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so.

[Jack Altman]

Which actually functions at a certain size.

[Marc Andreessen]

Yeah. Like up to 150 people.

[Ben Horowitz]

You can kind of deal with that.

[Additional Participant]

Yeah.

[Marc Andreessen]

You know, at the size of like.

[Ben Horowitz]

New York City, it actually gets quite complicated.

[Marc Andreessen]

At the scale of the world, it's like a disaster.

[Ben Horowitz]

It's a disaster.

[Interviewer/Moderator]

Right, yeah.

[Marc Andreessen]

But you could say, look, like we went through this eight year period where like, everybody went. Just say everybody went nuts.

[Ben Horowitz]

Everybody went nuts in like a thousand different ways.

[Marc Andreessen]

And then. But maybe that was just.

[Ben Horowitz]

We had to get used to it.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

Maybe we just had to adapt to it.

[Marc Andreessen]

And like, if you talk to, I.

[Ben Horowitz]

Don'T know, if you talk to, like young zoomers now, you know, a lot of the time what they'll tell you is, yeah, we don't take any of that stuff seriously.

[Additional Participant]

Yeah.

[Marc Andreessen]

Like, I just.

[Ben Horowitz]

Of course, you don't believe what you see on, you know, whatever. TikTok.

[Jack Altman]

Yeah. Which is wild.

[Marc Andreessen]

It's just all ops, like, of course.

[Ben Horowitz]

It'S all ops, like, whatever.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And they just have, like, they're.

[Jack Altman]

They're a d. I'm glad people know. It's just like, that's a crazy state of the world.

[Marc Andreessen]

Yeah, yeah, yeah, exactly.

[Jack Altman]

Probably how people feel about, like, the news, too.

[Marc Andreessen]

Well, so this is the thing on the news. So then this is the other thing on the news, which is, was the news ever as we were told that it was? And so the. My favorite example of this is people.

[Ben Horowitz]

Always cite Walter Cronkite as being the great truth teller. And the thing that they cite for you young people, he used to be on tv.

[Jack Altman]

Heard of him? I have not.

[Marc Andreessen]

He was this guy where he would show up on tv, everybody would say.

[Ben Horowitz]

Oh, my God, he's going to tell you the truth. Like, he was like. He was like the voice of the truth.

[Marc Andreessen]

And the way that he built that reputation is because he went negative on.

[Ben Horowitz]

The Vietnam War in 1968. In 1968, he came out and he said, the Vietnam War is unwinnable and we need to pull out of this. And they aired all these reports that showed that that was happening. Everybody said he's the guy who told the truth and hold power to account. Tell the truth.

[Marc Andreessen]

Well, it's just like the problem with that is he went negative. The fact that he went negative on.

[Ben Horowitz]

The war in 1968, he was positive on it before that, Right, Exactly.

[Jack Altman]

What did he know the day before he said that? That he wasn't sharing.

[Marc Andreessen]

Yeah. And like. And then, by the way, what else happened in 1968?

[Ben Horowitz]

Which is the White House went from a Democrat to a Republican.

[Marc Andreessen]

So the Vietnam War was created by Kennedy and Johnson, and then it was.

[Ben Horowitz]

Inherited by Nixon in 1968.

[Marc Andreessen]

And isn't it convenient and interesting that.

[Ben Horowitz]

He went negative on it when it became Nixon's war, as opposed to being Kennedy's, Kennedy's and Johnson's war.

[Marc Andreessen]

And so then it's like, all right, like, what was actually going on there?

[Ben Horowitz]

What was happening in the preceding fight? Five years. And is, was he actually on his side the whole time?

[Marc Andreessen]

And then there's just the reality of.

[Ben Horowitz]

It, which is, I grew up in rural Wisconsin.

[Marc Andreessen]

We always thought the press was out to get us.

[Additional Participant]

Yeah.

[Marc Andreessen]

Like, we always thought the press was.

[Ben Horowitz]

Like, the coast, basically passing sneering judgment on the center of the country. Like, we never believed, like, the stuff to start with. And we were always, like, very people. Where I grew up, people are, like, super resentful of the stuff in the media and how it portrays them.

[Marc Andreessen]

And so I think there's also, like.

[Ben Horowitz]

A more fundamental underlying issue here, which is, you know, objective truth is a.

[Marc Andreessen]

Like, Objective truth is a high bar.

[Additional Participant]

Yes.

[Ben Horowitz]

People have agendas.

[Additional Participant]

Yeah.

[Ben Horowitz]

Like, maybe we just need to get.

[Jack Altman]

All this out on the table, particularly in politics. Objective truth is not really how a lot of, like, people like, oh, that's a lie. I'm like, well, it's not a lie. It's just like an interpretation of a situation that, like, I wouldn't characterize, but, like, sure, it's like that.

[Ben Horowitz]

And these are complicated topics. You know, the ordering of society is a complicated topic. Yeah, right. And the function of the economy is a complicated topic, and it's just not so easy to understand.

[Marc Andreessen]

And so, So I. I think part of it might. The optim. The optimistic view would be humanity adapting.

[Ben Horowitz]

To being in the global village is basically just taking on a bit. Little bit of a more humble attitude, basically saying, all right, look, there's not going to be. We're not going to have a lot of objective true tellers running around. We're not going to have. But also at the same time, we don't want to be in a complete panic about everything all the time. And we need to kind of be able to, you know, take a deep.

[Marc Andreessen]

Breath, touch grass, be a little bit.

[Ben Horowitz]

More skeptical, be a little bit more open, be a little bit more understanding.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so maybe we're starting. And by the way, I think that's happening.

[Ben Horowitz]

I. I mentioned that Jake Tapper, without getting into partisan politics, but the Jake Tapper book, I happen to Went to an event that he did this weekend. And like, it's a.

[Marc Andreessen]

Like that book and the reaction to the book.

[Ben Horowitz]

And if you watch the interviews on YouTube and the crowd response to that.

[Marc Andreessen]

Book, like, it feels like people are.

[Ben Horowitz]

Just like, oh, like if we just take a step back for a moment from like all the intense partisanship of it all, like, there's actually some.

[Marc Andreessen]

Like, maybe we can get back a little bit more. I thought it was. That book is a very positive step.

[Ben Horowitz]

Forward towards just a little bit of a calmer approach on these things.

[Marc Andreessen]

And then, by the way, the other.

[Ben Horowitz]

Book I'd promote on that is the Ezra Klein book on. On Abundance.

[Additional Participant]

Yeah.

[Ben Horowitz]

Which I think is.

[Marc Andreessen]

I think is a, you know, somebody.

[Ben Horowitz]

Who supported a lot of Democrats for a long time. I think it's like the most positive, you know, kind of manifesto that's come out basically saying, you know, no, like we need, you know, whether you're on the right or the left, like, we need to actually build things. And I think that's also a healthy moment.

[Jack Altman]

So sort of related to this topic a little bit adjacent. But I saw you talking about preference falsification recently and I think this is like a super interesting topic in general, but particularly in the last, I don't know, call it 5ish years, I think a lot of preference falsification became made apparent. So I'd be curious first to hear a little bit about what you think happened over the last some number of years, where these changes happened. Maybe we can start there and then I've got a follow up on it.

[Marc Andreessen]

Yeah. So the preference falsification, just sketch an outline. It's when people. It's actually.

[Ben Horowitz]

There's two different definite. There's two different elements of it.

[Marc Andreessen]

It's when people are required to say.

[Ben Horowitz]

Something in public that they don't actually believe or they are prohibited from saying something in public that they do believe. Right. So again, so commission omission issues and then the theory of it. There's this great book by Timur Koran on it.

[Marc Andreessen]

The theory of it basically is it's easy to think about what this happens.

[Ben Horowitz]

In the case of a single person, which is, are you telling the truth or are your public statements mirroring what you actually think or not?

[Marc Andreessen]

The thing that gets complicated is when.

[Ben Horowitz]

That happens across a group or across a society.

[Marc Andreessen]

And the thing that happens is if.

[Ben Horowitz]

There'S widespread preference falsification of society, you.

[Marc Andreessen]

Not only have people lying about what.

[Ben Horowitz]

They actually think or hiding it, but you also. Everybody loses the ability to actually know what the distribution of views are.

[Marc Andreessen]

And he says, basically, if you look.

[Ben Horowitz]

At the history of political revolutions, a political revolution happens when a majority of the country realizes that a majority of the country actually agrees with them. And they didn't realize it. Right. So that whatever system they were in had convinced them that they were in a very small minority.

[Marc Andreessen]

And then you get, at some point.

[Ben Horowitz]

There'S the boy who.

[Jack Altman]

It's like a catalyst.

[Ben Horowitz]

There's a catalyst, catalytic moment. And then basically there's what he calls a preference cascade.

[Marc Andreessen]

And then all of a sudden it's.

[Jack Altman]

Like the correct prisoner's dilemma's box to live in. All of a sudden flip. Everybody realizes that at once.

[Marc Andreessen]

Yes, exactly. And he said, you can see this in. You can see this like in a.

[Ben Horowitz]

Crowd with like, a speaker, controversial speaker, where basically, like, you'll have a controversial speaker and then there'll be silence in the crowd. And then one brave person will start clapping.

[Marc Andreessen]

And that person is like, at severe peril because if they're the only asshole.

[Ben Horowitz]

Standing up clapping like, that's it. They might get killed.

[Additional Participant]

Yeah.

[Marc Andreessen]

But then if it cascades, then a second person starts clapping, and then a third and a fourth and a fifth, and then you get the snowballing effect.

[Ben Horowitz]

And then the entire auditorium is clapping.

[Marc Andreessen]

And then that's everybody realizing.

[Ben Horowitz]

Realizing that they actually are on the side of the majority, which they didn't.

[Marc Andreessen]

Realize before, by the way. This is what comedy. This is actually why comedy so much. It's what comedy does. Well, because people can't control the involuntary responsibility.

[Jack Altman]

Yeah, exactly.

[Marc Andreessen]

And so when you get an entire group of people in a room laughing out loud at something that individually, they.

[Ben Horowitz]

Will all swear they can't help it. That funny. They can't help it.

[Jack Altman]

That's a great point.

[Marc Andreessen]

And then the stress relief from that because they all know that they're part of a. They've rebonded the community.

[Ben Horowitz]

Right.

[Marc Andreessen]

You're actually back in being a part of a community. And it's just such an incredibly powerful feeling.

[Additional Participant]

Feeling. Yeah.

[Marc Andreessen]

Yeah. Okay. So, so it's very easy to apply this theory to, like, the Soviet Union.

[Interviewer/Moderator]

Right.

[Ben Horowitz]

Or like the, you know, the, the, the, the, the, you know, the Eastern Europe, you know, in the Cold War or whatever, you know, Maoist China.

[Marc Andreessen]

It's a lot, you know, trickier to.

[Ben Horowitz]

Apply this theory to, you know, your current society.

[Marc Andreessen]

I believe that, you know, we've lived.

[Ben Horowitz]

In an era of like, intense preference falsification. I think the last five years, yeah, probably the last 10 years were like, way more intense. Preference falsification than the procedure exceeding 40 at least. You know, probably going back to. I don't even know. I mean, you have to go for sure back to the 60s, if not like the 1920s or something, to find an analogous period.

[Marc Andreessen]

I think this period was characterized both.

[Ben Horowitz]

By people who were saying things they didn't believe, but critically not saying things they didn't believe.

[Marc Andreessen]

Yeah, I think there are many reasons this happened. And look, this has happened many times in history.

[Ben Horowitz]

And so a lot of people want.

[Marc Andreessen]

To say this is caused by social media.

[Jack Altman]

Right. Well, when you phrase it the way that you said, it actually makes a lot of sense when it's just if people are going to be in a part of this prisoner's dilemma matrix, it actually just gets caused by nothing other than itself. Like, it doesn't really need an outside catalyst for people to get into the wrong box.

[Marc Andreessen]

That's true. Although there needs. I know that's a good question. Does there need to be some kind of oppression? Does there need to be some kind.

[Ben Horowitz]

Of motivation for, for the, for the cascade to have started where people end up in that box?

[Marc Andreessen]

It's a social pressure. So, yeah, specifically, I think the thing.

[Ben Horowitz]

That happened the last five years was.

[Jack Altman]

I guess it needs to be a high stakes enough issue for it to matter. Otherwise it's just like, who cares whether you think, like the clouds are pretty or not.

[Marc Andreessen]

Yeah, that's right.

[Jack Altman]

So at least has to be that.

[Marc Andreessen]

Yeah. And the way I think Tim McCrory.

[Ben Horowitz]

Described it is it needs to have like political, social, cultural salience.

[Additional Participant]

Yeah.

[Ben Horowitz]

Like it needs to get to something fundamental about how the community is organized. You know, we call, we call that politics. But you know, this, this predates even the concept of politics.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so, and by the way, look like you don't even necessarily want to.

[Ben Horowitz]

Say that all preference falsification is bad because, like, you know, I don't know that you want everybody out telling the truth about everything.

[Jack Altman]

I don't think you do. I think at least in like a, like social, like a lot of social graces come from people saying it's great to meet you when I didn't feel like saying it was great to meet you.

[Ben Horowitz]

I believe your baby is very effective.

[Jack Altman]

Exactly. So some of it's good.

[Marc Andreessen]

Yeah. So yeah. But yeah, as your point, you get.

[Ben Horowitz]

Wedged in this box.

[Marc Andreessen]

And so I think the specific thing that happened. So the good news is preference falsification.

[Ben Horowitz]

In a lot of totalitarian societies was administered at the point of a gun. You say the wrong thing, they Shoot you.

[Additional Participant]

Yes.

[Marc Andreessen]

That for the most part is not.

[Ben Horowitz]

What happens happens in our society. What happens in our society is the sort of non violent version which is ostracized, canceled, ostracized. Reputation is ruined, fired, become unhirable, lose all your friends, lose all your family, can't ever work again.

[Jack Altman]

Still really bad.

[Ben Horowitz]

Still really bad.

[Marc Andreessen]

So you said it sounds pretty bad, very bad. And so, and it just turned out.

[Ben Horowitz]

I think part of, you know, the optimistic be would be part of adapting to the existence of social media was social media just turned out to be, among other things, a very effective channel to distribute, destroy people reputationally.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

With.

[Ben Horowitz]

And this is the social media mobbing effect, right, we're now all familiar with.

[Jack Altman]

And you think that helped create basically more false preferences?

[Ben Horowitz]

Yeah.

[Jack Altman]

Do you think it also unwound them?

[Marc Andreessen]

Well, so this is, this, this is the thing, and this is maybe the.

[Ben Horowitz]

Thing that happened in the 2024 election, right? Which is just like, oh, okay, like we don't have to live this way anymore. You know, it's certain, certain views become safer to say out loud. This also the censorship regime, like we lived under a very specific censorship regime.

[Jack Altman]

Even in tech for 2024 election versus 2020, 2016. Regardless of what you think, think you know, who you wanted, at least everybody can agree that it was taboo to support Trump in 16, and it was not taboo to support Trump in 2024 in tech. And so something changed there.

[Ben Horowitz]

Something changed. Peter had this great line in 2016. He said, because he was one of the only people, you know, maybe the only person in tech who was actually pro Trump in 2016.

[Marc Andreessen]

And he said, he said, this is so strange.

[Ben Horowitz]

He says, this is the least controversial contrarian thing I've ever done.

[Marc Andreessen]

He's like, half the country agrees with me. He's like, I've never had a point of view on anything else in my.

[Ben Horowitz]

Entire life where half the country agrees with me.

[Marc Andreessen]

And yet somehow this is such a.

[Ben Horowitz]

Heresy that I'm like the only one.

[Interviewer/Moderator]

Yeah, right.

[Marc Andreessen]

And so, yeah, so, so, so there was that, that, that definitely changed. And then I just think, in general, like I said, I think they're optimistically.

[Ben Horowitz]

You could just say there's a process of adaptation, right? Where it's just like, all right, we're.

[Marc Andreessen]

Just like, if, if we all just.

[Ben Horowitz]

Decide that we're just not gonna like live life by mobbing and scapegoating and personal destruction. And just because somebody's offended by something doesn't mean it's gonna destroy. You know, somebody says one thing it's gonna destroy their lives.

[Marc Andreessen]

Like, we don't, you know, you don't.

[Ben Horowitz]

Have to do that.

[Jack Altman]

Do you think it's basically been unwound now, or do you think there are still a lot of falsified preferences?

[Marc Andreessen]

I would say it's radically different than.

[Ben Horowitz]

It was two years ago. I would say there's still a lot of falsified preferences. I would, but.

[Marc Andreessen]

But again, I would say, and I.

[Ben Horowitz]

Think probably in any healthy society, there's lots of falsified preferences.

[Jack Altman]

So do you have any guesses for something that is currently falsified, that will become unfalsified or is too hard to call it?

[Marc Andreessen]

Sure. Yeah, sure.

[Jack Altman]

Okay, great.

[Ben Horowitz]

But it's far too dangerous to say.

[Jack Altman]

We'll move on.

[Additional Participant]

Yeah.

[Jack Altman]

Dang gosh.

[Marc Andreessen]

But again, when you ask that, that is a very key question. Here's what I encourage.

[Ben Horowitz]

Break the fourth wall.

[Marc Andreessen]

Yeah. Here's what I would encourage people to do. Here's the thought experiment to do. Just write down two. At least in the middle of the night with nobody around, doors locked, write.

[Jack Altman]

It down, a piece of paper, and let's pull it out in 10 years.

[Marc Andreessen]

Write down a piece of paper, two lists. What are the things that I believe that I can't say? And then what are the things that.

[Ben Horowitz]

I don't believe that I must say?

[Marc Andreessen]

And just write them down.

[Additional Participant]

Yeah.

[Marc Andreessen]

And I bet, you know, if you're.

[Ben Horowitz]

A reasonably introspective person, you know, the.

[Marc Andreessen]

Quote, unquote, NPCs can't do this.

[Ben Horowitz]

Like, if you're a reasonably introspective person.

[Additional Participant]

Yeah.

[Marc Andreessen]

You know, most of us probably have.

[Ben Horowitz]

10, 20, 30 things on both sides of that ledger.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And again, most of those are things.

[Ben Horowitz]

Where you gotta, you know, I don't know, like, you don't want anybody ever see that piece of paper.

[Jack Altman]

Maybe five or ten years from now, we'll be back and everybody can reopen their papers and we'll see. And it'll be safe to say whatever people wrote down at that point.

[Interviewer/Moderator]

Exactly.

[Jack Altman]

Okay. A few final topics wanted to ask you about. One is you're probably in a spot to be giving just sort of life or career advice to young people a lot now, both in general, but also maybe specifically with like, AI and like, the current set of tech, you know, changes right now. What do you most often find yourself repeating to a really smart, you know, recent grad about, you know, if they're like, what should I be doing with my career? If they get the chance to ask.

[Marc Andreessen]

You that to start with, I never took Any advice?

[Jack Altman]

So, yeah, there's something there, but a.

[Marc Andreessen]

Lot of people do, so maybe.

[Jack Altman]

Fair enough. That's like the, you know, if you could have built Facebook thing maybe.

[Marc Andreessen]

Yeah, maybe it's maybe, maybe the best.

[Ben Horowitz]

People probably shouldn't take any advice, but.

[Marc Andreessen]

I would just say, especially for young people, I, you know, and again I say this like people are very different.

[Ben Horowitz]

Like I believe very deeply.

[Marc Andreessen]

Some people, some people are very happy.

[Ben Horowitz]

Being in the middle of chaos. Some people are very unhappy.

[Marc Andreessen]

Some people are very unhappy being middle the of chaos.

[Ben Horowitz]

And they will actually get themselves out of a chaotic situation as fast as they can.

[Marc Andreessen]

Other people love chaos so much.

[Ben Horowitz]

If they don't have any, they will create it.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

And so like you have to, you know, that's true. There's a level of understanding here, you.

[Ben Horowitz]

Know, like not everybody should be in like a high growth, high risk tech company because it might just be too nuts.

[Marc Andreessen]

Yeah. So I don't think there's a one.

[Ben Horowitz]

One size fits all, you know, kind of thing at all.

[Marc Andreessen]

Having said that, let's narrow it.

[Ben Horowitz]

So young person who wants to kind.

[Marc Andreessen]

Of be in tech, I think a.

[Ben Horowitz]

Big part of it is, I think it's, as I was saying, it's like run to the heat, like, or the seam thing we were talking about, like where, where are the interesting things happening?

[Marc Andreessen]

And that's a conceptual question and it's.

[Ben Horowitz]

Also like a place question and a community question, network question.

[Additional Participant]

Y.

[Marc Andreessen]

And so, you know, run to that.

[Ben Horowitz]

As fast as you can.

[Marc Andreessen]

And it doesn't mean, you know, running.

[Ben Horowitz]

To the fads, but it means like.

[Jack Altman]

Trying to identify, trying to get into those hot network or ideas or projects basically.

[Marc Andreessen]

Yeah, yeah, exactly. And look, there's a geographic component to that.

[Ben Horowitz]

And I think we all kind of wish it wasn't the case, but there really is.

[Marc Andreessen]

And AI. AI I think has very successfully unwound.

[Ben Horowitz]

The geographic dispersion of what was happening in tech.

[Jack Altman]

And huge way, huge way.

[Ben Horowitz]

It's kind of slammed everything back into Northern California.

[Marc Andreessen]

I don't think that's good really for.

[Ben Horowitz]

A lot of reasons, but I think it just is the case. And so I would say, like, if, you know, if you're going to like do AI get here.

[Marc Andreessen]

Yeah. And then look, and then the other.

[Ben Horowitz]

Thing is, it's the Steve Martin thing be so good they can't ignore you. Like time spent on the margin, getting better at what you do is almost certainly better than most of the other uses of time. The old adage of you are the average of the five people you spend the most time with is also true. You want to do that. So you want to pick that carefully.

[Marc Andreessen]

And then I guess what I would say is when I talk to people.

[Ben Horowitz]

About what kind of company to go to, there are certain people who should only be in a raw startup and.

[Marc Andreessen]

There are certain people who should only be at a big company.

[Ben Horowitz]

I think the general advice is it's the high growth companies. It's the companies that we would describe as between, like being between like series C and series E probably or something.

[Additional Participant]

Yes.

[Ben Horowitz]

Where it's like they've hit product market fit, they've hit the knee in the curve and they're on the way up. On average, that's going to be the best place to go because you're not going to have the downside risk of a complete wipeout usually.

[Marc Andreessen]

And then people who get into that.

[Ben Horowitz]

Position, like at those high growth companies, if you're talented, you can pick up new responsibility very quickly.

[Additional Participant]

Y.

[Jack Altman]

Okay, next is your Andrew Huberman thing that I see on Twitter. Like what's. I actually can't completely parse what it is. What's going on with that?

[Marc Andreessen]

So we have a completely fake beef. We're good friends.

[Ben Horowitz]

We're very good friends. And we're actually neighbors. Neighbors in Malibu. And I've been on his podcast and we're very good friends.

[Jack Altman]

But you don't follow his protocol.

[Ben Horowitz]

I don't do anything that he says. I don't do a single thing that he says. With one exception we'll talk about. But yeah, I don't do any of it. He says maintain a regular sleep schedule. I. There's no.

[Jack Altman]

You're all over the place on sleep.

[Ben Horowitz]

All over the place. He says always get up, you know, get up, you know, see sunlight as early as you can. I'm like, no, I don't want that. To see sun. Last thing I want to do when I wake up to see sunlight. You don't drink caffeine for the first two hours of the day. It's like nfw. It sounds like torture. It sounds like being in a North Korean concentration camp. Like I can't even imagine. You drink a lot of coffee, A lot of coffee. Hot plunge, cold plunge thing. I'm not.

[Jack Altman]

The cold plunge is miserable.

[Ben Horowitz]

I'm not doing any of that shit.

[Additional Participant]

Yeah.

[Jack Altman]

You think it's good for you though, all this?

[Marc Andreessen]

Oh, I'm sure it's.

[Ben Horowitz]

I'm sure it's good for you. I'm just not. I'm not going to do any of it. It all sounds Just completely miserable.

[Marc Andreessen]

That's good. The one thing that he says that.

[Ben Horowitz]

I, I do is stop drinking alcohol. And I would say I am, I am physically much better off as a result. And I'm. But I'm very bitter and resentful.

[Jack Altman]

It is.

[Marc Andreessen]

Towards him specifically.

[Jack Altman]

Why'd you, why'd you do that one?

[Ben Horowitz]

Because it's much better for you physically. Like, it, it, it really is. Like, it fixes sleep and energy problems.

[Jack Altman]

So is the most tolerable of all of these and you're like, fine, I'll do one.

[Marc Andreessen]

Well, no, it's completely intolerable.

[Ben Horowitz]

It's horrible.

[Jack Altman]

Okay.

[Marc Andreessen]

I don't recommend it. Like, I think it's a horrible way to look live.

[Additional Participant]

Yeah.

[Ben Horowitz]

Like, I'd much rather be drinking alcohol.

[Jack Altman]

Does he think even like, a glass of wine at night's bad?

[Ben Horowitz]

He does, yeah.

[Jack Altman]

Just all of it.

[Ben Horowitz]

He did one of the great. He's actually had, I think, big influence on the culture. And this is very.

[Marc Andreessen]

In seriousness.

[Ben Horowitz]

This is very positive.

[Additional Participant]

Yeah.

[Ben Horowitz]

I think at least for health, as he did this big, big thing on.

[Marc Andreessen]

There's all these alcohol. So what happened is there's all these.

[Ben Horowitz]

Alcohol, there's all these fake alcohol studies. Basically, you know, this is like red wine and then it's like all, you know, heart protective and all this stuff.

[Marc Andreessen]

And it basically, it basically turned out.

[Ben Horowitz]

That really sick people either drink a lot or nothing. And then him and healthy people, people tend to drink a little.

[Additional Participant]

Yeah.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

So. So, so one is healthy people tend.

[Ben Horowitz]

To be very well disciplined.

[Additional Participant]

Right.

[Jack Altman]

And then I guess, is that correlation or causation? Is that correlation?

[Marc Andreessen]

It's all in the sample set. So, so, so it turns out there's.

[Ben Horowitz]

No health benefits to alcohol. That was all completely fake.

[Marc Andreessen]

In other words, just because I see healthier people drink a moderate amount of alcohol does not mean that drinking a.

[Ben Horowitz]

Moderate amount of alcohol makes you healthy. I see Michael Crichton called this wet streets cause rain.

[Marc Andreessen]

Okay. Wet streets rain.

[Additional Participant]

Yes.

[Interviewer/Moderator]

Right.

[Jack Altman]

So for some reason, unhealthy people stop drinking.

[Marc Andreessen]

Unhealthy people stop drinking because they're, they're like in the house.

[Jack Altman]

Cause like, I can't handle that.

[Marc Andreessen]

Yeah. Their doctor says if you keep drinking, you're going to die. Or by the way, they drink a lot.

[Interviewer/Moderator]

Right.

[Marc Andreessen]

Because there's this fundamental thing which is healthy people tend to be very disciplined, but discipline is not discipline.

[Ben Horowitz]

There's a big inherent component to it.

[Marc Andreessen]

And so people who are disciplined, who drink moderate amounts of alcohol, also do.

[Ben Horowitz]

Moderate amounts of exercise, also experience moderate amounts of Stress also go to the doctor on a regular basis. They take the medication, they're prescribed.

[Marc Andreessen]

They live all aspects of their health.

[Jack Altman]

And I guess it'll take a while to see, but it feels like it should be a good thing that Andrew and other people have gotten so many more people interested in health.

[Marc Andreessen]

It's good physically, right?

[Additional Participant]

Yeah.

[Jack Altman]

Might not be good mentally.

[Marc Andreessen]

No. I'll be funny again. It's catastrophic. Emotionally. It's made me a much less happy person.

[Jack Altman]

Do you think? Are you actually, you think that?

[Marc Andreessen]

Well, so I really. Alcohol is a time thousands of years.

[Ben Horowitz]

People have been using it, number one, to fundamentally relax. And then there's a very important social loop lubricant component to it. You know, it's like.

[Jack Altman]

And the de stressing could be healthy.

[Marc Andreessen]

So let's just say maybe it's not accidents.

[Ben Horowitz]

The birth rate is crashing. Right. At the same time that we hold stuff or anything. Right. I don't think Andrew would argue you should not live your life purely maximizing for just physical health. That'd be a miserable way to live. I mean, it's like, what are you going to do? Just like, never leave the house, Never take the risk crossing the street. And so, you know, he certainly doesn't judge people for drinking modern amounts of alcohol. He just says, look, scientifically, you have to understand it is a poison.

[Additional Participant]

Yeah.

[Marc Andreessen]

Now, having said that, as you know, speaking of scenes, as, you know, the.

[Ben Horowitz]

Displacement thing that's happening is people are like our world. They're not drinking alcohol. Instead, they're, like, doing hallucinogens.

[Marc Andreessen]

Why are you saying it's not necessarily an improvement?

[Jack Altman]

It's you, Jack, know very well.

[Marc Andreessen]

Yes, yes. Tell us about your latest Ayahuasca trial.

[Jack Altman]

Yeah, exactly.

[Marc Andreessen]

You're so much different than you were.

[Ben Horowitz]

Last time I saw this.

[Marc Andreessen]

Your personality has clearly completely changed.

[Jack Altman]

Yeah, I do feel different.

[Marc Andreessen]

So the other theory would be there's.

[Ben Horowitz]

A law of, like, conservation of drug use, which is every society is going to pick some drug, probably.

[Jack Altman]

Right.

[Ben Horowitz]

And abuse it. And apparently in our case, it's going to be like LSD and mushrooms.

[Jack Altman]

Sounds like a good one. Okay. Okay, my last question. When I tweeted out a request for questions, I got almost ratioed by one question. So I'm going to ask this one, like, nearly verbatim. It was by an anon named Signal. If you were frozen for 100 years and you woke back up and you looked around, what would be the piece of data that you'd want to know that would tell you whether or not your dominant worldview turned out to be correct in the fullness of time.

[Marc Andreessen]

Yeah. So I will pick a very unfashionable answer to this.

[Ben Horowitz]

And I would say United States gdp, just like straight out US gdp, because I would say embedded in that is the question of technological progress, which is if you have rapid technological progress, you'll have rapid productivity growth, which means you'll have very rapid GDP growth. If you don't, you won't have rapid GDP growth. So you'll see that in the GDP numbers. And we're immediately, you know, number two is, you know, well, number two would be just like our market's a great way to organize and the US Is the best market. And so, you know, is that. Is that going to keep working?

[Marc Andreessen]

And then third is.

[Ben Horowitz]

Does. Is the US Going to be a great country?

[Jack Altman]

And you are long all of this.

[Ben Horowitz]

I am very long. All three of those.

[Additional Participant]

Yeah.

[Marc Andreessen]

I am very convicted on all three of those.

[Ben Horowitz]

But, you know, if I'm wrong about something big, it's. It's going to be something in there, and it will show up in that number.

[Jack Altman]

Mark, this is amazing. Thank you so much. Again.

[Interviewer/Moderator]

Good.

[Ben Horowitz]

Awesome. Thank you, Jack.

[Narrator]

Thanks for listening to the A16Z podcast. If you enjoyed the episode, let us know by leaving a review at Rate this Podcast.com a16z. We've got more great conversations coming your way. See you next time.